Real Estate Expert Answers - DROdio Real Estate, Inc., VA/MD/DC

Find the homes for sale around you, wherever you are. Seeking beta testers.

DROdio Real Estate, Inc — Mon, 22 Sep 2008 12:17:44 -0500

Find the homes for sale around you, wherever you are. Seeking beta testers.

As some of you know, I'm a R.E. broker in the Wash DC metro area and also a technology entrepreneur.

I've co-founded a company that does something pretty neat: It sends location data to the browser. Here's why that's such a big deal:

For the first time, your MLS home search tool can be "location aware", meaning it knows where the user is, and can display the listings that are near that user.

Imagine using this on a phone! An agent or consumer could see the homes for sale around them, wherever they are.

It's great for a "I hate the house but love the neighborhood" type scenario.

In fact, our real estate company has taken the technology, called PointAbout, and applied it to our search tool. Check out www.TBHSE.com/mobile. You can also see a video of the tool in action below, and you can read about the company behind the location-based technology at PointAbout.com

I'm also actively looking for other Realtors that want to try hooking this into their local MLS system, either by using our mobile search interface or developing your own.

Daniel.Odio@PointAbout.com or call me at 202.250.3846.

Video of PointAbout in Action:

Want to Save Money and Sell Without a Broker? Probably Not as Sweet as You Think

DROdio Real Estate, Inc — Sat, 31 May 2008 18:27:20 -0500

This past Thursday, I received a news alert article in my email inbox from my U.S. News & World Report. It spoke of how the National Association of Realtors and ForSaleByOwner.com, an internet based company that markets the houses of independent sellers, differed with each other’s data on the percentage of independent sellers for all homes sold thus far during the housing downturn.

While the article provides links to both reasons to use an agent and reasons why you would consider not to, it marks the importance of what a realtor brings to transactions. The article tries to present both options in a neutral manner; however, when looking over the reasons, the only advantage to going independent is saving a little money. Even ForeSaleByOwner says that on a $300,000 home you could save a possible $18,000.

It is true that you can save money by doing the work yourself, but electing to go without an agent requires lot of time, research, and being able to negotiate and legally disclose what must be disclosed. It is also true that every person is capable of selling their house on their own. But just because you can do it, does not mean that it is recommended or wise.

The problem that I have with persuading people to try and sell their house independently is that only certain people can do it effectively. You cannot treat selling your house as a “do-it-yourself” project.

There is always going to be people who will chose to change their car’s oil in their garage instead of taking it to Jiffy Lube. It is also popular to go to Home Depot and talk to a sales associate about how to strip and re-stain your deck yourself. What you need to learn to sell your house independently cannot be learned by skimming either a website or any For Dummies book. If you do something wrong, it won’t mean a quick fix-it trip to the local hardware store—instead it can mean a lawsuit, lost time, and more time to sell your home than what it should have taken.

It is important to remember that your home is probably the biggest investment that you will ever make. Making a mistake in selling your home could cost you far more than hiring a professional agent will ever cost.

Here are a few advantages to using and agent rather than attempting to sell independently:

The agent facilitates the whole transaction process from setting appointments/meetings, negotiating with furnishing legal documents, and taking on related menial work.
An agent will help you with liability issues. We live in a society where people bring law suits for anything. If there is misunderstood statement or a problem not disclosed can lead to big problems. A professional and experienced agent will know what must be disclosed to a buying party.
The agent can serve as a negotiator and can be necessary to ensure that all agreements are recorded and put on paper. A potential buyer may find it hard asking the owner for a lower price; however, and agent can negotiate on the owner’s behalf.
An agent can separate emotion from price. An agent knows neighborhood prices and can help you price your home so that you don’t cheat yourself and drive away prospects.
An agent has access to resources. An agent has the ability to include your home in the Multiple Listing Services (MLS). An agent will save you money from having to buy your own yard sign, buy and print your own flyers and pay for newspaper advertising.
Using an agent will save you time. Are you ready to give up weekends to hold open houses? Do you have the time to perform your own market analysis to properly price your home? Are you available for appointments during the week, evenings and weekends? Do you have a flexible work schedule? Remember, you may not sell your house quickly, so this could go on for months.
Most people who are serious about buying a house will use an agent. They want to make a quick transaction and will not waste their time driving around neighborhoods looking for “For Sale by Owner” signs. Agents are not going to show your house—you are on your own to attract buyers. Better hope those ads work.
Most importantly, you can sell your home worry free. Using an agent provides peace of mind. Most people are unfamiliar and sacred about what types of forms, inspections, regulations, tax liabilities and laws there are concerning property transactions.

It is important to evaluate your own situation. Do not let success testimonials easily persuade you. Just because you knew someone who got lucky selling their house independently does not mean your experience will go so smoothly.

For the Drawbacks of Selling Your Own House or the 5 Reasons to Hire A Pro to Sell Your Home from the U.S. News & World Report article, click on the links.

Interview with Sue about foreclosure REO listings

DROdio Real Estate, Inc — Sat, 24 May 2008 07:05:00 -0500

DROdio: This an interview with one of our DROdio Real Estate Agents who is listing REO / foreclosure properties for a major bank, which is a very large bank as most people know. So I’d love to start the interview by just getting an idea of whatyou think from the listing agent’s prospective and what kinds of things you see buyers doing and what you think about the market.

Sue Ko: An interesting thing that I am seeing in the market is actually that it’s not so much foreclosures that are bringing down the market, but it’s the short sales. For example, there’s a subdivision in the Loudon County, which I will not name, however, that community has seen a decrease in about a hundred thousand dollars of equity in the span of six months. And if you actually look at the sales data and the sales history of the last six months then you can see that every single time there has been a huge jump down in prices whenever there’s a batch of short sales among the market.

And, the reason for that is because short sales, the very point of a short sale is not only are you shorting a bank in the amounts due, but you’re trying to sell it in a very short amount of time. So the people who are trying to sell the properties have to compete with all the other properties on the market. So they have to price it very, very competitively, which means that they are going to be far below the market rate. So pricing a property far below the market rate it stands out and allows a property to be sold quickly.

But what happens is then the other short sales properties that come on the market try to compete now with that new price. And then for me as a listing agent for foreclosure properties for a major bank I send in what’s called a BPO, it’s Broker Price Opinion and a broker price opinion is essentially a way for me to tell the bank what I think the market price is for the property. I have to use sold data and I have to use currently actively marketed properties data to give them examples on the pricing.

So unfortunately, I have to include the short sales, because evidentially the foreclosure properties are going to be competing against these short sales. So then the foreclosure properties having to compete will bring down their price as well down to the short sale level. So then you have a whole batch of short sales that are this lower price and then the foreclosure is dropping their price to compete with that and then before you know it you have a new batch of short sales and they have to be even more competitive than these already lower prices so that they can stand out in the market. So then you have this market that’s always in this down pressure and this one single community has effectively gotten itself to the point where it’s lost a hundred thousand dollars on average of equity per household in six months.

DROdio: So from what price range to what price range? Because a hundred thousand dollars on a million dollar property is less…

Sue Ko: But this a town-home community where things were, twelve months ago things were going for the mid to low three hundred’s and then about six months ago they were going at just around three hundred give or take. So high two hundreds to just at around three hundred thousand. And then now similar properties with similar square footage and levels and bedrooms and bathrooms are going for at around two-twenty, two-thirty maybe for the better properties and if it’s in a poorer condition then they are going right at around two hundred and some of the smaller properties in the same subdivision are going in the highs, one hundreds.

DROdio: Wow, that’s amazing.

Sue Ko: It is. It really is. And I think some people might have lost 50% of their equity depending on when they bought it. If they bought in the height of the market then they most certainly lost up to and more than 50% of the equity.

DROdio: So buyers always want to know these days should I wait or should I buy. Do you have thoughts for buyers when you get asked that question?

Sue Ko: The thing about buyers is that most buyers are, the ones who are unable to make a decision should I buy or should I not buy are the ones who really driven by fear. Fear of what’s going to happen to the market, fear of what’s, you know, can I afford this house. And I all I can say is you really have to inform yourself and buying a property isn’t right for everyone. If you’re just relocating to the area and you’re not familiar with the area then it is highly recommended that you familiarize yourself before you make that big purchase and I think that’s always fair to say. But for some people it’s a matter of gathering information and making an informed decision. Interest rates really at some of the lowest points in our nation’s history and it is a great time to take advantage of that.

However, there is a lot of talk of deep recession and I know some people have dropped the word depression here and there. So depending on where you’re located and what your lifestyle is, I’m sure everyone’s feeling the economic situation a little differently. But if you are a buyer and you have thought about it for quite some time to purchase a property I think it’s a really great time to buy. And I know every realtor is going to say it’s a great time to buy, it’s a great time to buy, it’s always a great time to sell, you know, we always say that. But it is truly a great time to buy, because one there’s a lot of inventory so the buyers have a lot of options, which wasn’t the case three to five years ago when properties were being snatched up in less than a day on the market. So now you just have so much inventory that you really can pick and choose.

The other thing is it really is a buyers market and sellers have the mentality down to almost expect to give concessions and also with the FHA loans raising their conforming limits to seven twenty-nine, it allows people to get into FHA loans into bigger single family homes when they weren’t able to do that before. The great thing about FHA loans is that you can get up to 6% credit from the seller and 3% of which can go towards a down payment and 3% of which can go towards the closing costs. It could essentially have a down payment 100% financed, so 97% financed property with very little money out of your pocket.

DROdio: So what do these new FHA rules mean for people? Most people, I don’t think, really know what FHA, how that differs from a regular loan. What’s it like to write a contract for an FHA property or when you’re listing a A major bank home and you get an FHA loan, what are some of the differences between conventional and FHA loans?

Sue Ko: The thing about conventional loans and FHA loans, there’s a lot of advantages to the buyer for an FHA loan, however, there are some disadvantages to the seller of FHA loans and so buyers and sellers should both be aware of that. FHA loans will have tighter restrictions on appraisal and so an appraiser can go out to the property and they’ll note certain safety hazards and they’ll ask that those items be required prior to funding.

So the sellers could, the buyer may not want anything fixed for the home inspection, but if the appraiser says, well we need these items fixed in order to fund your loan then all of a sudden you have a situation in hand where someone is going to have to give. Either the buyer pays at settlement or the seller’s going to have to pay for it. So those situations can arise. And there are certain fees to the seller for the FHA loan, it’s usually under six hundred dollars, but those buyers and sellers should definitely know about that. Conventional loans, when an appraiser goes out and does an appraisal it is for the value of the property and they’re not necessarily looking for safety hazards or code violations or those kind of bind ups.

They are really looking at the market value of the property. But an FHA loan appraiser is going to be more detailed, because it’s the government, pretty much, insuring the property, mortgage insuring the property.

DROdio: So how do REO properties compare to regular properties?

Sue Ko: In what way are you asking?

DROdio: For example, somebody’s thinking about buying a property, what do they need to know to consider the differences between a regular property with a real human seller versus a bank owned REO property. How might these experiences differ?

Sue Ko: The first thing is the buyer should be aware, as well as the buyers agent, that they are no longer dealing with a human being on the other side they’re dealing with numbers. And what I mean by that is at the end of the day for a bank it’s going to be the bottom line and a lot of people have approached me and asked me, well is there a specific math that’s related to how much is owed on the property by the previous mortgagor minus a certain percentage and there is no math like that, that I’m aware of.

What I do know is that bank usually spend quite a bit of money trying to get the property ready to be sold and part of that process is getting the right price. And so they ask brokers like us to give them a price opinion, as well as do an in-house review, in-house appraiser review and they also do independent appraisers, they have them go out and appraise the property as well. So what people should understand about foreclosures is that the bank isn’t basing the price off of the previous mortgagors amount that is owed to them, they’re basing it off of the market rate. I get so many phone calls on the property listings where the buyer or the buyer’s agent tells me well I’m going to put in an offer at a 100K below, do you think the bank will take it, because I don’t want to waste your time and I tell them, you know, forget about wasting my time, you’re really going to be wasting your time, because the bank is aware of what the market price is and they like to price it competitively to the market rate.

And it’s not equal to than sometimes a very, very low amount below so that it’s more appealing. However, they’re not in the business of losing their shirts on a property just because it has a stigma that it is a foreclosure.

The other thing that everyone should know about is the fact that there is a general stigma to the foreclosures that it is an incredibly good deal and that it is far below the market value and it’s just not the case in this market and the reason for that is because the foreclosures are happening, a lot of the times, on properties where people do not have any equity. And what that means is because it was a 100% loan, 103% loan, 107% loans, you know, all these loans that were fully financed that are being foreclosed upon, you’re not going to find the properties that are 80% of equity, 60% of equity like you did ten years ago.

You are just not going to be finding those crazy, crazy priced properties unless there is, you know, some defects that are known and the bank has to price it accordingly.

DROdio: Well thank you for all of the information today. I hope to talk to you again soon.

Sue Ko: Thank you.

Corporate client condo rentals in DC

DROdio Real Estate, Inc — Sat, 24 May 2008 06:56:07 -0500

We often have clients asking us about how to get cash-flow positive rentals. It's very hard to do in the metro DC area.There is one exception, though, that I've found works really, really well: rent your unit to a corporate tenant.

Here's how it works:

You have to offer a fully furnished unit, including dishes, towels, etc. (not hard - just visit Ikea and get the basics).
You have to be willing to do short-term rentals (3 months+)
You have to pay all the utilities, cable, etc.
Your unit probably needs to be near Metro and be no bigger than 2 BR (1 BR's are preferred)

If you can cover these 4 items, then you'll very likely be able to land a corporate tenant. There is often a waiting list for these types of units, so getting a tenant doesn't tend to be very difficult. Although the term can be as little as 3 months, it's often longer - 6 months to a year.

Corporate tenants are great for a number of reasons:

They pay about 30% more than an average tenant. Most corporations authorize up to $3,000/month for a 1 BR rental. Usually you can only rent a 1 BR in downtown DC for $1,800 to $2,000/month.
They take good care of your unit: Since these are generally executives for large corporations that are living in the units, they often work late and are traveling much of the time. This means little wear & tear on your unit
They pay their rent on time: Since the corporation is basically paying the rent (usually they give the executive a certain sum, for rent, and the executive then pays you), the tenant is very unlikely to default.

We work with a very established corporate housing provider in DC who usually has a waiting list for these types of clients. If you'd like us to introduce you, just contact us at right.

How do you keep track of agents who show my home, and buyers who will see my home?

DROdio Real Estate, Inc — Fri, 23 May 2008 22:05:26 -0500

We have an advanced CRM (CRM = "Customer Relationship Management") system - basically a large database, where we input all showings & customer views. However, it's much more than just a database. Here's how it works:

An agent shows your property. When they use their lockbox key to open the lockbox on your property, we get an alert on a website, telling us they've shown your property. Here's what that page looks like (click image to enlarge):
We input this data into our CRM system, so we have the name, phone number and email address of each agent & buyer who has seen your property. Here's what that looks like (click to enlarge):
We then call & email each agent for feedback. If you'd like, you can also upload any business cards that agents leave at your property by going to www.DROdio.com/showings . Either way, whether you do it, or we do it, the agent will get a request for feedback, and we'll be able to tell you how interested the buyer was, and if they weren't interested, why, so you know what you'd have to do to your property to get the buyer interested. And if multiple buyers point out the same issues with your property, then you know it's something you should change!
By having all interested parties integrated into this CRM system, we can quickly & easily let all of them know when there are changes to the status of your property. For example, when we get an offer, we can quickly tell all the other agents that we have an offer, to see if any of them have interested buyers. Or if you decide to change the price, we can quickly alert everyone of the price change. This makes easy work out of what is a very laborious process for most real estate agents (in fact, many don't even bother because they don't keep track of all the agents who have shown the property!)

Does a seller need to have a permit to finish a basement?

DROdio Real Estate, Inc — Fri, 23 May 2008 22:01:44 -0500

Yes, and here are the requirements for Fairfax County.

It's also possible to check on the Fairfax County website to see if a permit has been filed for a specific property.

How can I find homes with upcoming open houses?

DROdio Real Estate, Inc — Fri, 23 May 2008 21:56:07 -0500

We have a *great* way for you to find open houses, using our search tool www.BirdsEyeSearch.com

Here's how you do it:

On the right side, there's a link that says "Advanced Search Options" (see image below & click to enlarge):

Once you click on that link, you'll see a new row show up on the left side, like this (click image to enlarge):

Just choose "yes" and run your search as you usually would. By having clicked "yes", the site will only return properties that have open houses in the next week or two. To see when the open house is, do this (click to enlarge):

Enjoy this free tool!

What is the “capital contribution” condo fee for?

DROdio Real Estate, Inc — Fri, 23 May 2008 21:54:12 -0500

The capital contribution is fee paid at closing to "jumpstart" your condo fee account & is required by condo management companies to ensure that there is enough working capital for the condo. It is usually only paid by first-time buyers in a new community or condo building.

Where can I find school boundary maps in Fairfax, VA?

DROdio Real Estate, Inc — Fri, 23 May 2008 21:51:49 -0500

Here are Fairfax County's school boundary maps and a reverse look-up by address for school boundaries in Fairfax, VA.

I heard there’s more development coming to Potomac Yard in Alexandria. Is that true?

DROdio Real Estate, Inc — Fri, 23 May 2008 21:50:11 -0500

Yes here are details on what's coming:

How we kept a buyer from making a BIG mistake

DROdio Real Estate, Inc — Fri, 23 May 2008 21:47:10 -0500

On our quest to show you that buyer agents really do make a big difference in your home buying process (even for new construction properties, when you may think you don't you need any representation), we have a perfect example to share with you.

We had a buyer who was very (very) interested in putting an offer on a ~$1MM single family home in Washington, DC.

We requested the disclosure from the seller. Buried in the disclosure was this text (click to enlarge):

Apparently, the previous owners of the property had put an addition on the property, but had overstepped their lot boundary when adding the addition, and thus, the addition was "too close to the property" line.

The listing agent told me "not to worry about it" because the sellers had secured an easement in perpetuity from the neighbor whose lot they were encroaching on. (An easement is a "right of use" of the land).

This seemed fishy to us. Our agent, representing the buyer, asked the listing agent for a copy of the easement, which the listing agent provided us. But we still weren't satisfied. We figured that the fact that an addition was built that violated a property line must mean that the proper permits had not been pulled when it was constructed. And that would mean that if the DC zoning board were to find the addition in violation at any point in the future, our client, the buyer, would be liable for the addition. That would be a really big liability for the buyer. So, we called the DC zoning board. Below is an email we sent our buyer after after talking to the zoning board:

ØØØØØØ - recommend you not make an offer on ØØØØØØ. Here's why:

Just left you a VM.

Talked to the DC zoning board... there are 2 potential violations for this property:

1) violation of code: built w/o permits
2) built over lot line: another violation

There are no permits on file for this property.

If a violation is found, you would have to go before the board of zoning adjustments to request an exemption; 6 month process & may not be approved because over lot lines. If not approved, you would have to remove addition.

Spoke to ØØØØØØØØ @ Zoning board: 202-442-4576

The buyer agreed with our assessment: It was just too risky to put an offer on this property. If the zoning board came calling, the process to have it approved retroactively would be very expensive and time consuming, and if it were not approved (which it likely would not be, since it violated lot lines), the addition would have to be torn down.

How does one quantify the amount of money, time & headache we saved our client in this transaction?

Would a buyer without an agent have caught this issue?

Maybe, maybe not. One thing we can almost guarantee you is that if you were to have the listing agent help you with the paperwork (i.e., you go into the transaction without an agent), the listing agent would not have called the DC zoning board, since their clients were truly the sellers, not you, the buyer.

What’s the difference between a condo & a co-op?

DROdio Real Estate, Inc — Fri, 23 May 2008 21:43:30 -0500

If you check a listing carefully, you might notice that it is one of three property types:

Fee Simple
Condo
Co-op

Fee Simple means you get a completely undivided interest in the real estate property, such as a home or a town home.

Condo means you own a small piece of a bigger structure - the typical thing you think about when you hear condo.

A "co-op" is different. It looks & feels like a condo, but you're actually buying a "certificate" share of the building. You don't actually own any real estate. Because of this, we don't like co-op's as much as regular condos, because you don't really own the real estate.

What is the HUD-1? And how do I read it?

DROdio Real Estate, Inc — Thu, 22 May 2008 11:23:58 -0500

The HUD-1 is the document used at settlement to account for all the monies in a transaction. It's a federally mandated form, and it also happens to be a very hard document to read, so we're going to help you learn to read it.

The HUD-1 is usually a two-page form (often front & back). For the purposes of this discussion, we'll use this sample as the front of the HUD-1 (click on image to magnify):

And we'll use this sample as the back of the HUD-1 (again, click on image to magnify):

On both the front and back of the HUD-1, the left side is the "buyer's column" and the right side is the "seller's column". On the front of the HUD-1, on the left-hand buyer's side, you'll see a red box marked "A" on the top, and a green box marked "C" on the bottom. Box A is the sum of all the debits the purchaser is paying as a part of this transaction. We've circled a number in this box, in the amount of $23,298.38, which is the total of the settlement costs the buyer is paying to purchase the property. More on that later.

Box C shows all the credits the buyer is getting, including any loans being used to purchase the property (the loan is considered a credit in this instance because it keeps the buyer from having to use his own money). At the bottom of box C is any money still due "FROM" the buyer at settlement, or money due "TO" the buyer at settlement. In this example, $3,406.19 is being refunded "TO" the buyer at settlement. However, in most instances, the buyer will have to bring additional funds to settlement. When this happens, the funds must be in the form of a certified or cashier's check.

On the right-hand seller's side, box B shows credits being paid to the seller, and box D shows debits being deducted from the seller's proceeds. Below box D shows cash going "TO" or being collected "FROM" the seller. Usually the seller will have money being paid "TO" him, however in some instances (like when the seller can't sell the property for as much as he paid for it), the seller may be required to bring money to settlement.

On the back of the HUD-1, the left-hand side shows all the monies the buyer is paying in closing costs to purchase the property (box E). You'll see that in our example, this number totals $23,298.38 - and was carried over to box A in the front page on line 103, where it shows up in the buyer's debits section. So basically, page two is just showing, on a line-item basis, how that $23,298.38 in costs was calculated. The right-hand column on the back of the HUD-1 (box F) shows the monies the seller is paying to sell the property, and you can see that the seller's total costs, in this case $27,509.55, carry over to line 502 in box D.

Why do you always say that “The sales price has almost no correlation to the price at which a seller will sell”?

DROdio Real Estate, Inc — Thu, 22 May 2008 11:18:07 -0500

OK home buyers, are you listening? When we tell you what we're about to tell you, you'll probably respond saying "well thanks, Captain Obvious" but we'll walk you through what you probably haven't considered, and why it matters to you if you're looking for a home. Ready? Here goes:The sales price has almost no correlation to the price at which a seller will sell.Let me repeat it:The sales price has almost no correlation to the price at which a seller will sell.Seems obvious, right? Here's why it's not obvious:

First of all, if you want to buy a $500k house, you're probably browsing the market in the $500k listing range. That's where you're wrong. You should be looking in the $600k range. Why? Because you can make a lowball offer and have a good chance of getting the property. Want to understand how the process works? Watch our "successful lowball offer" tutorial. And here's a real example of it working.
You are probably buying based on emotion, not logic. Don't do that! You lose all your leverage that way. If you walk into a house and say, "gosh, this house is beautiful. Honey, this is it!" then you've lost all your leverage. You have to be willing to buy a house that's not quite ideal if you're buying logically. Read our "Pick 2" blog to understand what we mean, and again, watch the successful lowball offer video.
Here's the crux of why the sales price has almost no correlation to the price at which a seller will sell: Let's say that two houses are listed side by side, each for $600k. The reality is that in one of those houses, the seller might be dying to sell. Maybe it's already vacant and they are paying two mortgages. Maybe they were just laid off from their jobs and are about to go into foreclosure. Who knows! And maybe in the property next to it, the sellers have all the time in the world to sell because they're retiring and want to move to the Outer Banks but are in no rush. So how can you tell that at the first property the sellers will take an offer of $500k just to stave off financial ruin, while the neighbor won't go below $595k no matter how long the property sits on the market? The answer is, you don't know unless you use an expert (yes, that would be us) to implement the (yes you guessed it) successful lowball offer strategy.

If you don't want to make a lowball offer, that's great. It's less work for us. It takes a lot of work to put lowball offers in! Most other Realtors don't want to take the time to do it. But we're set up in ways that allow us to be very efficient making lowball offers (you can also learn more about our electronic signature process & other technology innovations that help us be more efficient.)

Seeking brokers re: DROdio Strategy for 2008 and beyond

DROdio Real Estate, Inc — Wed, 06 Feb 2008 01:48:25 -0600

Our firm has always done a great job servicing clients locally. But recently, we’ve realized something else: We can help other REALTORS do the same thing by referring deals to them.

Through some marketing wizardry, we’ve watched our online traffic grow by more than 100 fold, from an average of 20 unique visitors per day in early 2007, to an average of over 2,500 unique visitors per day as of February, 2008. We expect these numbers to keep rising.

In fact, here are two of our traffic graphs:

DROdio Real Estate, Inc. traffic, Jun ‘07 to Feb ‘08

TheBestHomeSearchEver.com traffic, Jan ‘07 to Feb ‘08

We have implemented a referral network for “top producer” agents because we’ve been getting more leads than we can handle - upwards of 100 per week. Our strategy is to place leads with top, local agents. We are now making arrangements with brokers from other metro areas throughout the U.S. to expand our referral network past the Washington, D.C. metro area, onto the nationwide stage.

We expect we can achieve over 10,000 daily unique visitors by this Spring in the DC/VA/MD areas, generating over 500 leads per week, to be distributed to our network of top agents.

We charge our network of agents a 25% referral fee per deal closed. At an average home purchase price of about $300,000, we generate approximately $2,250 per closed deal. Assuming 1% of our leads turn into closed deals, we expect to be able to generate $33,750 in weekly commission income for our network of agents (over $1.6MM annually), and $11,250 in weekly gross commissions for our firm by the Spring. If we can get 10% of our leads to turn into closed deals, just add a zero to the numbers above, etc.

As a note, a big “thank-you” to Chris, our marketing guru, for driving some incredible traffic to our sites, and to Jason, our lead programmer, for turning that traffic into actionable leads.

Should I get a termite inspection if my lender is not requiring one?

DROdio Real Estate, Inc — Tue, 29 Jan 2008 16:57:31 -0600

Yes you probably should. They only cost about $30 to $50. The inspector will check the grounds of the property near the house, and may do some limited checking inside the house as well.� He is looking for any signs of termites, like tunnels, etc. Most properties in VA don't have termite issues, although there can sometimes be termites in the mulch outside the home.� Since homes in this area have concrete foundations,� they're not as susceptible to termites as homes in other parts of the US, where they can be a big issue.

YouTube Video: How to make a successful lowball offer

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:52:12 -0600

Making a lowball offer often has a negative connotation, but the reality is that many sellers are happy to look at any and all offers in today's market. This tutorial offers tips & tricks on how to successfully make a lowball offer.

YouTube Video: How Realtor Commissions are Really Paid

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:49:36 -0600

Go "Behind the Curtain" and learn how Realtor Commissions are paid, what that means for you, and what you can do to leverage the knowledge.

YouTube Video: Buy a House like a REALTOR would

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:46:55 -0600

Learn the tricks to buying a home like a professional Realtor would.

YouTube Video: How to Buy Auction & Foreclosure Homes

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:43:18 -0600

What are real estate auctions like? What's the difference between courthouse auctions & REO auctions? What is a good foreclosure buying strategy? We have answers! The first thing you should do is visit our blog describing process. Then, watch the videos below, on courthouse auctions & REO auctions:

We recently visited an auction held at the Hilton in McLean, VA with hundreds of REO (bank owned) properties being auctioned off:

Here is a related post where we describe the entire short sale / foreclosure / REO process.You can also learn the tricks to using our tools to find pre-foreclosure, foreclosure and bank-owned homes.

Lastly, here is a video of a 2 hour seminar we held on how to buy foreclosure, auction & REO properties:

Can I buy a foreclosure / short-sale / REO home?

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:40:13 -0600

The foreclosure market is starting to heat up in a big way, and more foreclosures are on the way. Being a smart foreclosure shopper, or at least including foreclosures in your search, is a smart move, but you must approach these homes carefully. Here's a brief primer on the topic. You may also want to read this FAQ that talks specifically about auctioned properties. For more details, please contact us.First, you should know about the different types of foreclosure options, and the benefits & risks of each:1. Short Sales: A short sale isn't exactly a foreclosure, but actually a seller who can't sell his home for enough to cover the mortgage due on it. Short sales didn't used to happen much because people used to put at least 20% down, but in the last few years, with many of the more exotic loan programs, people were able to buy homes for no money down, or even in some cases, where the loan was as much as 107% of the home's value. As you can imagine, in a market where prices have been flat and even declined in many areas, that was a recipe for disaster.In a short sale, the seller is negotiating with the bank to allow them to sell the home for less than is owed. The bank agrees to take less than the mortgage amount because they know the alternative is likely that the seller won't be able to keep up with mortgage payments, which can lead to foreclosure - and that's an even worse option for the bank.One of the biggest risks to short sales is that the seller won't be able to successfully negotiate with the bank to have them reduce the money due on the seller's mortgage. Because of this, you need a savvy Realtor who can ensure you're protected if that happens. Yes - a shameless plug to call us, but in all seriousness, we're talking many tens of thousands of dollars at stake here.Additionally, as with all foreclosure type sales, the banks can take a long time (months - yes, months - in many cases) to respond to your offer, which can be very frustrating. There are a lot of steps the seller has to go through to complete a short sale.2. Courthouse Foreclosure Sales: A foreclosure sale is usually held on the courthouse steps. Most of these homes are sold at auction. In the past, the banks could almost always unload a property at auction because the bank only needed to recover the mortgage amount, and thus, many properties sold for less than their market value because the mortgage was less. But again, the exotic loans of the past 10 years have made this a much less certain thing - often now, a bank needs to recover just as much or more as the property can sell for on the open market, meaning many of these homes won't sell at all. Who would want to bid on a property at auction for more than you could buy it via traditional means? Us neither. In fact, we feel buying a property at auction is often the most dangerous of the three options listed here, because you usually have little or no inspection rights, and you can't have any contingencies. Plus, you most often have to buy the home with cash, or if not all cash, at least with a substantial cash deposit. And lastly, there are few lending sources for auctioned properties - no bank is going to loan you money to buy a home if an appraisal hasn't been done, for example. Here is a great Washington Post video of a foreclosure sale happening, as well as videos we took on the foreclosure and auction process.3. REO (Real Estate Owned) Sales: REO is just a fancy term for "Shucks, I still own this property because I couldn't sell it at auction" that the banks have. Remember how we said above that many foreclosure properties aren't selling at auction because the amount owed on the mortgage is as much or more than the market value of the home? Well, when the property doesn't sell, and the bank has evicted the owners from the home, it goes to REO status. This is where we think a lot of the value to buyers is, because the bank at this point must sell the property. It's vacant, and the bank has no hope of getting any mortgage payments while it sits vacant. Plus, REO properties are handled much like traditional sales, where you are not pressured to move fast (like you would be in an auction setting). You can take your time, perform your inspections, and make sure this is truly the property you want.Sometimes, the owner still lives in the property even though it has been foreclosed upon. In those cases, the bank often offers the owner a "cash for keys" agreement where the ex-owner is paid a sum of money - between $500 to $2,000 - to leave immediately, and give them the keys. The bank figures this is cheaper than evicting someone. Here's a sample of what the document looks like (this one was posted on the ex-owner's door).In fact, we have a website that is really good at helping you find foreclosure properties, called www.TheBestHomeSearchEver.com or www.TBHSE.comfor short. That site searches all of the MLS listings by all Realtors in the DC metro area - usually about 100,000 listings. And we have a special checkbox which allows you to search short sale, foreclosure, and REO properties in the "bargain hunters" tab. To learn exactly how to use this feature, you can watch the video tutorial. And of course, we're available to help. You can contact us any time at 1.800.705.2782 or email us at info@DROdio.com. Better yet, submit a contact using the form at right and we'll respond right away.4. Post-REO Auction: If the banks can't sell their inventory as REO inventory, they use a private auctioneer to auction it off (often at hefty discounts).� You can see a YouTube auction video here.� These auctions can be tempting, but you face risks here as well.� One issue is you usually cannot inspect the interior of the property before bidding on it at auction.� It can also be difficult to obtain financing for these types of properties, since you can't perform the usual inspections & contingencies to ensure the property is in livable condition.� The properties are also sold in "as-is" condition and you have to pay a premium above the final winning bid price (usually 5% to 10%) to the auction house. Here is a sample auction contract you can read to learn more.� You can also see a list of homes that were auctioned off recently.If you'd like to get really technical, you can download this PDF complied by MBH that discusses VA Foreclosure procedures in detail.

What is a home warranty? How does it work?

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:36:01 -0600

Home warranties offered by 3rd party providers cover certain items in the home for a period of 1 year after the date of sale.Typical items covered include appliances & HVAC systems.� You can also get extended coverage for items like pools & spas and other parts of the house.A policy typically costs around $400 and has a $50 to $100 deductible.Our view on home warranties is mixed.� If the seller is paying for one, then definitely get it.� But if you're considering buying one on your own, you should Google the provider names below and do some research on them.� We've found that they often try to deny claims if there's any question as to whether or not the item qualifies.� For example, one client had "pool & spa" coverage but when the inside control panel failed, the warranty company said it wasn't a covered item because it wasn't a "necessary item" to run the pool (i.e., it was a "convenience item").Here are several providers in our area:

HMS Home Warranty
2-10 Home Warranty�
AHS Home Warranty (this is the firm the customer had the pool problem with, so we're not too keen on them)

Note:� the warranties discussed in this section are different from builder home warranties, so don't get confused!� We are discussing third-party warranties for resale properties.

YouTube Video: How to get a bigger house while paying the same monthly mortgage amount (and not feel bad about it)

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:35:02 -0600

Learn how to leverage a loan type we really like called the "30 year fixed with 10 years interest only" to get a bigger house while paying the same monthly mortgage amount (and not feel bad about it) .

Does the condo insurance cover the interior of your condo?

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:33:37 -0600

A client asked us:

Does the condo insurance cover the interior of your condo? -- this one I will probably be able to figure out from the condo docs, but if you knew off the top of your head that would be great.

Our reply:

The master insurance, which is part of the condo fee, is similar to homeowners insurance and in 99% of cases covers the building and unit, but not improvements inside the condo. ( Inside improvements are Kitchen appliances, wood and tile, counter, personal items, etc.)You would still want to purchase insurance that would cover interior improvements and personal content ( clothing, furniture) and accident liability normally referred to as a Condo owners policy.

What does "DOMM" and "DOMP" mean on the MLS listing?

DROdio Real Estate, Inc — Thu, 03 Jan 2008 23:32:49 -0600

In a listing, you may sometimes see the acronyms "DOMM" and "DOMP".� Here's what they mean:DOMM means "Days on Market, Multiple-List" and it's the number of days on the market for that current listing.DOMP means "Days on Market, Property" and it refers to the entire time the property has been active.So, for example, let's say a property is listed on January 1, 2007.� On January 31st, the DOMM and DOMP will both say "30" because it's 30 days later.Now, let's say that the seller decides to use a different listing company on February 1st.� � Under this new listing agreement, the DOMM would reset to 1, but the DOMP would not.� The property has to be off the market for 180 days in order for the DOMP to reset to zero.� To sum it up:� the DOMM resets every time there's a new listing number, and DOMP resets when a property has been off the market for 180 days.