Gary Duda's Real Estate Blog

master the obvious

RE/MAX Action Real Estate — Fri, 26 Oct 2007 20:17:33 -0500

Whether it's from hard work, luck or your Great Aunt Edna - you have gotten a listing. Congratulations!

Please do some basic things. Fill out all the fields completely in MLS. Upload as many pictures as you can of the house. Do a nice fact sheet on the house. Return calls from agents and the public. Do feedback on all showings and share that with your clients. Update your clients weekly on new listings in the area, price changes on competing listings, and on pended listings. If your listing is not selling after a few weeks, seek price reductions and ask your clients to make changes suggested from feedback.

None of what I suggested will cost you a dime but might just help you sell that listing and make a commission check.

Buyers can't make seller disclosures

RE/MAX Action Real Estate — Fri, 26 Oct 2007 17:08:47 -0500

In the hurry to get things done quickly, buyers' agents often will have clients fill out blank disclaimers and blank lead based paint disclosures for the listing agent to have the sellers sign. For agents who do this: DON'T!!

The law in most states (my guess is all states) is that sellers have to provide buyers signed disclaimers/disclosures. HUD requires the seller/landlord provide a buyer/tenant a completed lead base paint disclosure and if there are know lead hazards, any records or inspection reports.

If buyers do not get the disclosure/disclaimer at contract time they have a 3 day review/recession period on the contract. If they don't' get it at all, they can walk from the contract anytime prior to closing. Why would a buyer's agent want to cut short any recession period that a buyer may have? By completing a disclaimer/disclosure in reverse order, the agents are actually creating a loop hole for anyone to get out of a contract.

As far as the lead based paint disclosures go, always follow HUD's rules and regulations. HUD has severe penalties for mishandling the lead base paint disclosure form. If you have a spare $10,000 go ahead and see what happens by incorrectly following HUD's rules on the disclosure of lead based paint. On second thought, $10,000 might not be near enough.

Also, buyers can't make disclosure for the sellers.

big a big fish in a small pond

RE/MAX Action Real Estate — Thu, 25 Oct 2007 17:51:26 -0500

Low on cash?

Have very few prospects?

Feeling really low?

Don't let fear paralyze your business. I'm going to give you a simple, inexpensive marketing plan. It's going to mean that you actually have to get out and work - so be prepared.

Step 1: Choose a 100-home farm area. Make sure the price range is between $125,000-200,000. Find an area with the highest rated schools. Run a CMA and get familiar with home sales over the past three to four years.

Step 2: Create a one-page flyer. You can use the templates for newsletters in Microsoft Word. On one section you will list sales in the area over the past 12 months. List the address, the sales price, the square footage, bedrooms/baths, and sale date. Even if you get that information from MLS it is also available in the tax records and should not put you in violation of your MLS rules and regulations. For other content write a biography about yourself and put in some information about the market. If you need other content, find a blog on ActiveRain that looks interesting. You could search my past blogs on CLUE reports. You have my permission to use it.

Step 3: Get clear plastic door hanger bags. You should be able to find these at your Realtor Association Store. If you can't find them there go to www.doorbags.com. Deliver your flyers to the neighborhood along with your business card. This might take you a couple hours but it's good exercise, and if your business is slow what else do you have on your schedule?

Step 4: You are going to create another flyer. This one has tips on getting your home ready to sell. Again use Microsoft Word and find a template that works for you. Microsoft Word is a great tool and fairly inexpensive. Make sure all your flyers/newsletters have your picture, contact information, biography, company logo, fair housing symbol, and the following disclaimer at the bottom: "if your home is currently listed for sale with another real estate firm, this is not intended as a solicitation." If there is a Realtor sign in the front yard just keep on walking. This flyer will go out two weeks after your first flyer..

Step 5: Prepare a for sale by owner packet. This packet will have your biography, tips on selling a home, information on your company, and your specific plan for selling homes. Take time and list out everything you do to list and sell a home. You'd be surprised how much you really do. You are going to keep this packet handy so that when a fsbo pops up in your neighborhood, you have it ready to hand deliver to their door step. Never call a fsbo - go there directly. Your are going to use this flyer on expired listings as well so watch your MLS "hot sheet."

Step 6: You guessed it - another flyer. The point here is that if you don't have money to order postcards, or create professional marketing pieces, anything is better than nothing. The third flyer can be on what controls the long term interest rates. You have my permission to use my earlier blog on this topic.

This plan might seem boring and dull, but if you work your farm every two to three weeks with a newsletter of interesting topics, you'll soon become a household name in your farm area. All it takes is one listing to get you going in your farm. From there you can slowly add households.

I've had agents follow this plan with great success and then stop once they had an income. My questions always is why stop something that works. The typical response is that "it's boring" delivering flyers. Funny, but I never get bored cashing commission checks. Do you?

helpful guidelines for marketing

RE/MAX Action Real Estate — Thu, 25 Oct 2007 11:58:49 -0500

Here is a helpful matrix I give my agents regarding marketing. This shows the per piece price of marketing materials and how much it actually costs to market based on increasing sizes of market areas.

Money is tight for new agents (all agents) so using marketing money wisely is very important. I suggest agents buy all their marketing material up front and have a plan to send out a marketing piece every two to three weeks. They probably want to buy enough materials for ten mailings/distributions.

This plan allocated .26 cents for direct mail. We have a direct mail center in house and can offer our agents low cost bulk mail. If they have to use first class postage the cost goes up. Agents can save money by distributing items door to door or in the bottom newspaper box. Never put anything in a mail box unless you want to get a very nasty call from the Postmaster.

Our suppliers are:

(This matrix first shows the per piece cost of marketing materials and then the cost of the combined mailing for various market sizes)

Postcards ($349 for 2,500)	0.136	0.136	0.136	0.136	0.136
notepads	0.19	0.19	0.19	0.19	0.19
magnets	0.5	0.5	0.5	0.5	0.5
envelopes	0.05	0.05	0.05	0.05	0.05
postage	0.26	0.26	0.26	0.26	0.26
door hanging bags	0.1	0.01	0.01	0.01	0.01
newsletter	0.035	0.035	0.035	0.035	0.035
Neighborhood/market size	250	500	750	1000	1250
Event #1 - Post card (includes postage)	100	188	282	376	470
Event #2 Note Pad (hand delivered with door hanger bag)	47.5	95	142.5	190	237.5
Event #3 -Post card (includes postage)	100	188	282	376	470
Event #4 - Magnet (hand delivered with door hanger bag)	125	250	375	500	625
Event #5 - Post Card (includes postage)	100	188	282	376	470
Event #6 - Newsletter (hand delivered)	8.75	17.5	26.25	35	43.75
Event #7 - Post Card (includes postage)	100	188	282	376	470
Event #8- Post Card (includes postage)	100	188	282	376	470
Event #9 - Note Pad (hand delivered)	47.5	95	142.5	190	237.5
Event #10 - Post Card (includes postage)	100	188	282	376	470
Ten event Totals	828.75	1585.5	2378.25	3171	3963.75

Join remax action

RE/MAX Action Real Estate — Wed, 24 Oct 2007 15:07:47 -0500

If you are an agent in the Central Virginia Region mark your calendar for November 13th from 7-9 p.m. We will be hosting a "carreer night" for agents who want to know more about RE/MAX Action. The event will be held at 11551 Nuckols Road, Suite D., Glen Allen, VA 23059. RSVP to Gary Duda @ 804-521-5601 or email at garyduda@remax.net.

The key to direct mail is to start small and stick with it!

RE/MAX Action Real Estate — Wed, 24 Oct 2007 14:31:20 -0500

If you plan on making direct mail a part of your Real Estate marketing plan - start small.

Realtors new to direct mail often take on too large a market area only to find they lack the funds and time to keep up with their program. The end result is that after a couple mailings the agent does not see results and gives up. The only guarantee with direct mail is that if you don't do it - it won't work!

If you want to use direct mail a better plan would be to start with a small neighborhood of maybe no more than 250 homes. For best results, plan on marketing to your farm every 10-14 days for a period of no less than six months.

Reducing the marketing size and increasing the frequency will greatly increase the effectiveness of your campaign. At the same time, you should be working any "for sale by owner" or "expired" listings in that market. If you have the time and desire, mixing in door-to-door canvassing will further increase your chances for success. You are trying to become the best known Real Estate name in your market and if you follow this plan you will be.

When beginning your campaign find a neighborhood that might be easy to break into. Your target market might include lesser priced homes that are not as targeted by experienced agents. The goal is to create an income stream so work smart.

Choose the items that you are going to send out. Post cards, notepads, refrigerator magnets, newsletters are among the items that work best. Don't be afraid to send out the same post card several times. You are trying to create name id for yourself. Homeowners won't care that they received the same card from you several times. In fact if they even notice, you are winning the battle.

Determine how you are going to deliver your marketing pieces. Don't mail everything. Using clear plastic door hanging bags is effective and less expensive. If your Broker does not offer in-house direct mail services using an outside direct mail house might be too expensive so try to use post cards that are small enough to use a post card stamps rather than a first class stamp.

Create a budget for all of your pieces and make sure that you can afford to stay committed to your program for six months. Price out all the marketing materials you will use, including the postage or labor for delivery. Go ahead and order all of your materials in advance. Ordering some items in bulk might be more cost effective. By having everything in hand from the beginning, you are more assured of staying on schedule rather than having to order things as you need them.

The longer you stay with a marketing program the better your chances for success. By focusing your resources on a smaller market you greatly increase the chances of getting that listing call. Once you have that first sign in the yard you are well on your way to being the neighborhood expert.

check list to getting home ready to sell

RE/MAX Action Real Estate — Tue, 23 Oct 2007 18:41:14 -0500

If you are getting ready to sell, here is an easy check list of what to do.

Make Repairs:

If there is wood rot, broken windows, damaged shingles or other visible damage, then have it repaired. It's a lot easier to sell a home that is mechanically and physically in shape. Fixing items before a home inspection also allows the items to be repaired more economically because the seller can make repairs without having to abide by sometime unreasonable repair recommendations. Buyers also hate to see repair items because they fear the home has not been care for by the sellers.

Cosmetic Items are cheap:

To quote a local handyman: "A little caulk and paint makes something it ain't." Caulking and painting are some of the least expensive things a seller can do that will have the biggest impact. It's best to have an experienced person do the work because nothing looks worse than a bad paint job and sloppy caulking.

When you touch up paint, don't use the paints in the garage if they are more than a year old or have been exposed to extreme temperatures. Take a small sample of the sheet rock skin and go to the local paint store. If you match the paint carefully you may be able to touch up rather than repaint entire walls. An experienced person can usually "feather" the new paint so that it softly blends into the old paint.

Curb Appeal:

You never get a second chance to make a first impression:

Make sure the yard is neatly cut and trimmed, bushes trimmed and beds freshly mulched.
If the trim needs painted - paint it.
Remove all screens from front windows - screens gray the windows (clean windows reflect the blue sky and make a house look amazing)
Wash windows
Does the house need power washed? That included gutters - a bright white gutter really makes the house look fresh.
Make sure your blinds are all evenly opened
If you have wood steps paint risers white
Remove bikes, skates, hoses, and other items from the front of the house

Clutter:

If anybody ever thought that selling a house was fun they might need to have their head examined. While your house is on the market it needs to be in "showing shape." By this we mean to remove all clutter and to have things neatly put away.

Reduce the volume of clothes in closets. Box up seasonal items, throw away old unused hangers, organize clothes and get everything off the floor.
Don't have rooms "over furnished." If there is too much furniture a room will look smaller. Rent a storage unit, use the garage, drop stuff off at the in-laws, but reduce the volume of furniture in the house.
Make the Kitchen shine by cleaning off countertops, the tops of cabinets, the refrigerator (except your Realtor's magnet) and organize the inside of your cabinets.
Organize garages, basements and attics to make storage areas look at large as possible.

Cleanliness:

Have the house professionally cleaned if possible. Focus on areas that are normally missed on week to week cleanings.
Clean all baseboards (especially before painting)
Clean tubs and toilets both inside and out
Clean all mirrors
Clean all windows both inside and out
Clean all vinyl and tile floors
Vacuum all carpets (have them professional cleaned if needed)
Clean out fireplace
Remove any cob webs

Last minute check list:

The house has been cleaned, painted, and clutter reduced. It's now time for one last look before showings begin. Here is one last check list of items.

Are there working lights in all fixtures? Are they the correct wattage?
Does every room have a light that can be on during showings?
Are all walkways in the house free of furniture?
Are there any odors from pets, cooking or smoking (have a unbiased friend or neighbor give you their opinion)
Are blinds open, heavy curtains tied back to allow light into the room?
Are the beds made, laundry put away, dishes in the dishwasher and teenagers exiled to the grandparents?
Is the yard picked up and in order

If everything is done as I've mentioned then at least you have given the home a great chance at selling for the most amount of money in the least amount of time. As you look at other homes you will notice that most people don't follow this advice, which hopefully is why a buyer will want your home instead of another.

the work really starts after the contract is written

RE/MAX Action Real Estate — Tue, 23 Oct 2007 13:36:03 -0500

Once the contract is written, the job of a good Realtor has really just begun. So has the job of a host of people including lenders, attorneys, title companies, insurance agents, home warranty companies and so on.

The beginning: Writing the contract.

Once the contract is written, the closing process is underway. (This document is geared toward the Richmond Virginia Market and there are minor to major differences in other areas of the state and country.) The contract must be sent to the following parties:

Lenders
Attorneys/Settlement Agents
Both Real Estate Firms
Buyers and Sellers

The closing process happens on several different levels before it all comes together at the end.

Lender Role:

The lender process starts before the writing of the contract with the purchaser beginning their approval process.

Once the lender gets the actual contract, the buyer usually has a set number of days to start the formal loan application process if that has already not begun.

At application time, the lender will have the purchaser fill out a formal application called a Form 1003 which is a HUD Document. That document is the formal application to apply for a loan.

The lender will also produce the "good faith estimate" of cost relating to the purchase. It's important to note that the good faith estimate is made up of charges from several sources - many of which are out of the control of the lender. This good faith estimate should closely match the final HUD1 Settlement Statement if done correctly.

The lender will be estimating not only his costs, but the attorney fees and charges, title insurance charges, local and state taxes among other things. Many lenders cut short these charges giving the consumer a false idea of their actual cost of purchasing a home.

The lender's obligation is to prepare the most accurate assumption of cost possible. If a lender does not accurately forecast property taxes, state and local taxes or any other expenses, the buyer could owe thousands more than they anticipate.

The lender will collect all appropriate documents, all supporting documentation, and collect an application fee for appraisal and credit report. Once the documents are complete/collected, the lender will give the borrower a list of any other documents that are still needed before loan approval can be granted.

Appraisal

Next the appraisal is ordered. This can be delayed by the whole house inspection because once the appraisal is done, the appraisal fee is not refundable.

Next the loan put into automatic underwriting. If the loan is not a government backed loan, underwriting happens by review of an underwriter. Once automatic approval or just plain old approval is given, guidelines for approval are matched with documents collected.

Once all completed docs match the approval conditions and application is done, the loan is submitted to underwriting for validation of the documents. Once the validation is compete, the loan is forwarded to the closing deptartment and all parties concerned - such as the attorney - to set up closing.

The purchaser's settlement agent/attorney

In Virginia, as in many states, an attorney or a settlement service can conduct a closing. However, in Virginia only an attorney can prepare a deed which is the major role of the seller's closing agent. It is the buyer's settlement agent that does the vast majority of the work, including the title search, preparation of the HUD 1 Settlement Statement and the actual buyer closing.

Once the settlement agent for the buyer receives the contract, a whole host of events are set into motion including the ordering of:

The survey
Title Search
Mortgage payoffs (sometimes done by sellers' attorney)
Taxes
Oil/Gas/HOA prorated fees

Title Insurance:

One of the first things to be ordered by the closing agent for the buyer is the title insurance. This might be delayed if the closing is projected to be very far out. Once the tile insurance is ordered, the actual title company will order their title search. The title search is a search of County/City records that seeks to establish a clear line of ownership without defects. A defect to a title search could include an unrecorded deed of trust, an unpaid lien or any type of cloud over ownership of the property.

In order for the title company to issue a title insurance policy over the property, all clouds to title must be cleared.

Survey:

A survey gives every homeowner a clear border line to know exactly what they do or do not own. If your property line is crossed, then an encroachment has transpired, and a Real Estate Lawyer will be needed to resolve disputed claims. It is common not to have a survey done in many areas if the buyer is obtaining "enhanced" title insurance which covers defects to surveys. Just because it is common doesn't make it a good idea.

Mortgage Payoffs:

The sellers' attorney or the purchaser's attorney/settlement agent may order the payoffs for the loans/liens against the property. The HUD1 will show these pay off amounts.

County/City Taxes

The buyer's settlement agent is responsible to make sure all taxes are current on the property. They also will collect 3-4 months of taxes in advance to that go into the lender's escrow fund.

Propane/Oil/Home Owner Association prorated fees

The settlement agent is also responsible for collecting information on prorated fees for oil, propane, homeowner's association dues among other items.

Realtor for the Buyer

During the process the Realtors are responsible for the following events:

Ordering Home Warranty (depending on who is purchasing it)
Conducting Home Inspections and forwarding addendum
Updating all parties for any changes in contract, including changes in closing dates
Forwarding all addendum to attorney/lender

Realtor for the Seller

Ordering Home Warranty (depending on who is purchasing it)
Ordering Termite Inspections
Ordering Well and Septic Inspections
Collecting Repair receipts
Forwarding all addendum to attorney/lenders
Ordering HOA documents

Insurance Agent

The Purchaser needs to choose the company that will provide their homeowners insurance. The settlement agent must have information from the homeowners' insurance company before the final settlement statement can be completed.

At closing the settlement agent typically will collect 15 months of homeowners' insurance premiums that will go toward the lender's escrow.

As closing day approaches, the attorney, lender and Realtors will collect documents needed per the contract and conditional loan approval.

Prior to closing the lender will send closing instructions to the purchaser's closing attorney/settlement agent. Those instructions will include information on fees to include on the HUD1 settlement statement.

The closing agent will send the final settlement statement to the lender for final approval. Once the lender approves the HUD1 Statement, the closing attorney has the green light for closing. It is only at this point that the lender can prepare the final closing packet and forward it to the settlement agent.

Preparation of the HUD Statement:

The settlement statement is a two page document that shows all cost relating to the seller and buyers' sides of the transaction. This form is uniform and fees have designated places to appear.

It is important to note that before a final HUD statement can be prepared and delivered to the lender for review, all fees must be shown. If the buyer has delayed obtaining their homeowners' insurance or a payoff cannot be obtained, the final HUD statement cannot be provided. This is why so many buyers do not get their final numbers until last minute.

Also note that the HUD statement does not have a place for repair or decorating credits. A seller can only pay closing cost, buyer prepaid items and points/origination fees.

Closing Day:

Final Walk thru:

It is important that the Realtor and his or her purchasers conduct a final walk through of the home. They should be looking to make sure all home inspection items are done properly. If there were major items they might want to bring their inspector back much sooner. You also are looking for any new items that might have occurred.

Don't skip this step because once you close you lose most of your leverage with a seller to correct deficiencies.

The Closing Table

Seller Closing - In the Richmond area buyers and sellers have their own separate closings. The seller will typically conduct their closing several days in advance. Their closing consists of signing the deed and some other papers for the IRS. In other areas all parties come together at the end.

Buyer Closing -

Hopefully the buyer has had a day to review the HUD statement but often the final HUD is not approved until a few hours before closing. With the final figures in hand, the settlement agent can instruct the buyer how much money is needed to close. That number is typically a few dollars higher or lower than projected by the good faith estimate. It is almost impossible for the lender to be 100% accurate in regard to the final closing numbers.

The closing agent will instruct the buyer to bring certified funds to closing. At closing it is very normal for the buyer to have to write a personal check for small differences or to get a small check back at closing.

The settlement agent will take the buyer through numerous documents including:

Loan application
Mortgage
Deed
Survey
HUD statement
Termite Inspection
Well & Septic Inspection

Once all the documents are signed, the buyer receives their keys. However, they legally don't own the home yet.

After closing the settlement attorney/agent must make one last check with the county/ciy to make sure there are no new liens against the property. They will record the old mortgage as satisfied and file paperwork regarding the new mortgage.

Once the settlement agent received the green light for the runner, then funds are dispersed. At this point the old mortgage is paid off and all other funds held in escrow by the closing agent are released.

Post Closing

Once the closing has occurred, the settlement agent will file information so that the tile insurance policy is issued.

Several weeks after closing the new home owner will receive their title policy in the mail.

It wasn't fraud that put most lenders out of business

RE/MAX Action Real Estate — Thu, 18 Oct 2007 08:43:43 -0500

In a free-market economy such as ours, the willingness to make money spurs on many things, including the housing and mortgage market.

Much of our recent real estate explosion was fueled by lenders lowering the bar on what it took to get a loan. The reason they lowered the bar was there were investors willing to buy those loans in the secondary mortgage market.

In the mortgage-money cycle of life, loans are made, they are sold in the secondary-market, and then loans with similar characteristics are packaged into mortgage-backed securities. These mortgage-backed securities typically are safe investments for pension funds and life insurance companies.

Over the past few years we saw other investors willing to buy mortgage-backed securities comprised of riskier loans. The bar kept on getting lower and lower to get a loan because investors saw a profit. Sure there was risk, but when there is a high enough return, investors will be there.

Investors finally saw too much risk and they are now turning away from the riskier mortgage-backed securities. This is happening daily which is why the qualifying guidelines are changing so quickly. If a loan cannot be sold in the secondary market, it won't be made at all. I doubt many lenders would portfolio a 550 credit score loan at 100% loan-to-value.

Many mortgage companies are closing shop. Sure a lot of fraud happened, but for the most part these companies built their business on making loans that no longer exist. It's not the first time this has happened and it won't be the last. Anybody remember Dan Marino and the Money Store?

It's not the Fed that keeps long term interest rates low

RE/MAX Action Real Estate — Thu, 18 Oct 2007 08:02:05 -0500

It's become common for the public to watch the actions of the Federal Reserve, thinking that their raising and lower of interest rates will have some affect on home mortgage rates.

The truth is that what the Fed does has very little impact on interest rates for most home mortgages. To understand what drives long-term mortgage interest rates you must understand where the money for home mortgages originates.

Home mortgage money comes primarily from investors. Once a mortgage is made to a homeowner it is sold on the "secondary" market and packaged with other mortgages becoming a "mortgage-backed security." This security is sold to investors who are looking for a predictable return on their money.

It is very common for pension funds and life insurance companies to invest in mortgage-backed securities. These securities have a credit rating based on the characteristics of the loans of which they are comprised. For instance, a security that is made up of high credit score, low loan-to-value loans would carry a very high rating for investors.

Mortgage-backed securities compete for investors dollars with the United States Treasury 10-year security or the 10 year T-Bill.

If the interest rate (yield rate) for the 10-year T-Bill rises, investors tend to move their money into that investment and away from MBS. If there is less money being pumped back into the mortgage market that tends to drive up interest rates. If the T-bill rate falls more investors turn to mortgage backed securities, pumping more money into the primary mortgage market and lowering long term interest rates.

When the Fed adjusts rates they are affecting the overnight rate they charge to their member banks. Changes in the short-term interest rate has an impact on interest rates for credit cards, automobile and boat loans, and home equity lines of credit. It can affect adjustable rate mortgages but does little to change the 30-year interest rate.

The recent "credit crunch" was caused mostly because investors stopped investing in the higher risk mortgage-backed securities. The bottom bar for investors' risk is rising every day which is why certain types of loans are increasingly become unavailable.

Keep in mind that there are two types of secondary lending markets, the private market and the government backed market. The government-backed market consists of Fannie Mae Freddie Mac.

Fannie Mae and Freddie Mac are shareholder-owned that have a federal charter and operate in America's secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates.

While the private secondary market has tightened its credit requirements, the government backed side has actually loosened their requirements to help ease the crunch.

If you are working with a marginal buyer make sure your are working with a lender who can broker all types of loans.

Let's spread some sunshine

RE/MAX Action Real Estate — Wed, 17 Oct 2007 07:29:47 -0500

Now is an amazing time to buy real estate!

Interest rates are historically low. There is lots of inventory. Builders are making deals. The sun is shining. The birds are singing and the crisp autumn breeze on my face makes me happy to be alive! Gosh, I feel like singing show tunes.

If you are in Real Estate, that is what ought to be running through your head and flowing from your mouth. Sure things are a bit tough now. We all know that, but the public is hearing enough of the bad stuff from the media. Bad news sells better than good news.

We have been through an incredible run in real estate. It was fueled largely by loose lending practices that put a lot of people in homes who really didn't' qualify. No doc loans at 580 credits scores -what were we thinking?

Now we are back to basics. The market is correcting itself and it will take some time. There is an ample credit supply out there, but not 580 credit score buyers who want 100% financing.

Real Estate is local. Your situation may be better or worse than an agent from another area of the country, but keep your chin up. Interest rates "are" historically low. There "is" lots of inventory. Builders "are" making deals. Now the stuff about the birds, the air and show tunes. Whatever floats your boat.

The elements are there for the market to pick up, but we have to be cheerleaders to our clients. It really is a great time to buy a home. Sell that thought to your clients and anyone who asks you how the market is. With roughly 1.3 million Realtors nationwide we ought to be able to drown out some of the negative reports from the media.

Just keep smiling.

Your success is ultimately up to you!

RE/MAX Action Real Estate — Mon, 15 Oct 2007 16:33:25 -0500

If your real estate business isn't all it can be, here are some important questions to ask yourself.

Do you consistently work a full 40-hour week at real estate?
Have you mailed out or used all of the marketing materials you have purchased in the past year?
Do you let more than an hour or two go by before returning emails or voicemails on a regular basis?
Have you taken a class within the past six months toward a Realtor designation such as GRI, ABR or CRS?
Do you go onto your MLS daily to see what is happening with new, pended, sold or expired listings?
Have you visited a new home subdivision this month to update yourself on new homes in your area?
Has it been more than 3 months since you have called your past clients?
Have you talked to your current buyer clients or sellers this week?
Have you worked for price reductions on listings that have been on the market for more than 60 days?
Have you actively done any type of prospecting within the last six months?

Now if you are happy with your level of production then it doesn't matter how you answered those questions. It might matter to your Broker, but that is between the two of you.

If you are unhappy with your level of production and answered no to even one of those questions, then you have a serious problem. Too many agents just want to sit around and complain about the market or their lack of production without taking any real responsibility for their own business.

Brokers are here to help their agents, but the agents have to first want to help themselves. If paying your bills and providing for your family won't motivate you, then maybe you are in the wrong business. If you feel lost and don't know what to do, ask your Broker to help develop a business plan. If they won't help you, then find a Broker who will or ask the other members of Active Rain to help.

It doesn't take a lot of money to be a success in Real Estate, but it does take a lot of work. Stop complaining about how bad things are and take a proactive step to make your business better. There is no shame in failure but there is shame in not trying.

Here are some things not to do that will increase your business

RE/MAX Action Real Estate — Mon, 15 Oct 2007 09:04:52 -0500

One of my last blogs was about name tags and car magnets - all great things to increase your visibility as a Realtor. However, I omitted some important common sense items:

If you are going to wear a name tag then please don't:

Be rude to people - they definitely won't call you. If you really must be rude please don't let them know you are a Realtor - our industry has enough image problems.
Talk on the phone while being served by a cashier/waiter (it's rude whether you are wearing a name tag or not. And by the way, these folks buy homes too)
Let doors shut on people behind you. Hold that door open for the next person.
Talk loudly on a cell phone in public places - don't do this without the name tag on either. Go outside or to your car to return the call.

If you are going to have magnets on your vehicle then please don't:

Park in the handicap spot unless you really have a handicap. I was at a convenience store recently and witnessed an agent park in the handicapped spot. His car magnets had his name, company name and contact numbers. The dozen or so people in line who watched him leave will never call him. He was not handicapped in the slightest - at least physically.
Run stop lights or stop signs.
Drive aggressively
Drive drunk - don't do this under any circumstance.
Have a really dirty car. I've seen some disgusting Realtor cars with magnets. You don't have to have a BMW but at least empty the last three months of coffee cups out of your back floor board and visit a car wash once and a while.
Speed in school zones. Actually don't speed at all. I saw an agent who got pulled over in a school zone and so did all the other parents who were dropping their kids off to school.

I guess I could sum this up by saying just be a good person. Our industry does have a bit of an image problem and we all can do things to change that but let's not advertise our bad behavior.

Inexpensive tips to increase your business

RE/MAX Action Real Estate — Sat, 13 Oct 2007 21:56:34 -0500

While there are many ways to market yourself as a Realtor, here are a few inexpensive methods that you may have overlooked.

When in public, always wear a name tag that says who you are and what firm you work for. It may sound corny, but I guarantee it will prompt people to ask you about real estate. The best name tags are magnetic and don't ruin clothing as easily as the ones that use pins.

I know this will bring jeers, but car magnets are also great conversation pieces. You might want to get something a little nicer looking than just the generic company Realtor magnet. If you have an SUV, you might even consider getting your name, company logo, and phone numbers lettered on the back glass.

On the home answering machine, always add that if this is for "John for real estate" please call 555-1212. That way anyone calling the house will be reminded of what you do. On your business/cell phones voice mails always identify yourself as a Realtor.

Always write letters and faxes on your letterhead, even if it's not business related. And always have your pictures, company logo, and contact numbers on your email. If you use Outlook you can set up a business card that automatically appears at the bottom of your emails.

Keep business cards with you at all times. While I'm on the topic of business cards, spend a bit more on your cards and get the laminated type. If you go to www.sbcards.com you'll find pricing. The cost is not that much more and it makes a nice impression on potential clients.

Take advantage of all free advertising sources, particularly the space provided by your MLS and company website. Completely fill out your biography and upload your picture. If people can't see your face and read a bit about you, they will keep on looking.

Utilize real estate blogs. They are great for networking with other Realtors and you'll definitely learn something new every day.

These suggestions won't break the bank and could put additional commission dollars in your pocket.

Feedback can turn a stale listing into a paycheck

RE/MAX Action Real Estate — Fri, 12 Oct 2007 15:24:28 -0500

Your listing isn't selling. Trust me you are not alone. However, your clients really "need" to sell and you feel frustrated - what can you do?

The answer is simple - give your sellers regular feedback on showings and on changes in the market.

Calling for feedback from showings is the key to getting any home sold - particularly a home that is for sale in a down market. Your clients need to know what buyers are thinking about their home. If you don't call for feedback from each and every agent who shows your listings, you are missing a great opportunity.

So what do you ask? Ask simple questions:

Did your clients like the house?
What were their favorite features of the house?
What did they dislike about the home?
Is this a home they may be interested in buying?
What would it take to make them interested in buying this home?
How do you (the agent) feel about our price?
Are there any suggestions you (the agent) have to improving this listing?
But don't stop there. If the buyers have no interest in your listing, then what do they like?
Are they interested in making an offer on another house?
What is their time frame for buying?

Besides feedback on actual showings, you also want to update your clients on the market around them. I suggest that you email them weekly the following information:

New listings that have come on the market during the week that are comparable to their home
Homes that have pended in their area and price range
Any price reductions on comparable homes
Homes that have expired or been withdrawn from the market

None of us can manufacture buyers. If a property is not selling but you are getting showings, the feedback will generally help you get a price reduction or help you convince your sellers to make needed changes to their home.

If you are not getting any showings, market updates will not only "CYA" but will help get price reductions. If other homes are selling, compare those homes to your listing and explain the differences to your clients. Be somewhat analytical about the differences. Maybe the homes that are selling have more square footage, a lower price, newer features or have an additional room.

If nothing is selling in the market, your clients need to know that too. Not only will that take the burden off you, but it might help you get a price reduction. If they really have to sell, and there are other homes that are better options, then a price reduction is in line.

Motivated sellers don't want to languish in the market. They want to sell. Give them the information that they need about past showings and current market happenings. If you do that you'll have a client who is comfortable with your performance. Get price reductions when necessary and keep your clients in the loop. If you don't keep your sellers informed, your listing will soon expire and another more experienced agent (or more lucky agent) will get it sold and get paid.

So What's a CLUE Report

RE/MAX Action Real Estate — Wed, 10 Oct 2007 10:30:05 -0500

If you are a homeowner you might want to be aware that filing an insurance claim for damage to your home could one day impact your ability to sell your property.

Insurance claims on homes now may be submitted to a 10-year old database called the Comprehensive Loss Underwriting Exchange Property Database (CLUE). Information on past claims is available for insurers who are looking to write policy on homes. Information on a CLUE Report might give an insurer reason to not issue a policy on a home or to insure it at a higher rate.

Imagine your home suffers water damage from a broken pipe and you file an insurance claim and have your home repaired. You may not have to disclose repaired damage to a future homebuyer but it more than likely will show up when that buyer's insurance company runs a CLUE Report.

Even if the insurance company is fine with information from the report, you may have an issue with a homebuyer who suddenly is nervous that the home they are buying had previous damage.

Claims that raise red flags to insurance companies are those from water damage due to issues relating to mold.

Reporting a claim is voluntary for insurance companies but if you are selling a home and have made a claim within the past five years it might be a good idea to find out what is on your CLUE Report. Homeowners can access a free CLUE Report on their home by going to www.choicetrust.com.

If you are a buyer it also might be a good idea to ask the home seller for a CLUE Report on the home. For Realtors, buyers and sellers looking at CLUE Reports up front will only save a lot of time and aggravation.

Buyers also need to be concerned about CLUE Reports because they show claims that an individual has made on previous homes. If you have made several claims and those show up on a CLUE Report you may not be able to obtain insurance or it may cost you more.

Homeowners might want to think twice before they make future claims for "trivial" items. Maybe the cost of fixing the damage yourself might be cheaper than calling your insurance company.

start planning your spring move now

RE/MAX Action Real Estate — Tue, 09 Oct 2007 11:44:24 -0500

If you watched all your friends and neighbors move this past year and you have vowed that next year will be your time to move - start your preparations now.

Too many homeowners wait until the last minute to get their home market ready and are often overwhelmed with all that needs to be done. Consequently, they either postpone a move they really want or sell their home for less because it needed some work.

Start your preparations by taking a good long look at your home. Call your Realtor and have him or her make recommendations on how to enhance the sale of your home. Make a list of all the things that need to be done before you put your home on the market and start working on that list a few items at a time.

For instance, if your yard is in poor shape, now is the time to aerate and over seed. If you are uncertain of what to do, visit your local lawn care center and ask them for advice or call a lawn care professional. The cool nights and sunny days of Fall make for perfect grass growing weather.

Are there rooms in your home that need to be painted? On those cold winter weekends painting a room or two is a good project and doing it yourself can save money.

If you need new carpet or vinyl do it now so that you can actually enjoy it before you sell.

Also start clearing clutter. Gather up your unwanted items and donate them to the Salvation Army or Goodwill. Not only will you make your home look larger but you will help others and receive a tax deduction.

While you are working on your home make sure you are financially set for a move. Have your mortgage lender look over your finances and give you a good idea of how strong your credit is and how much home you can afford. By acting now you may have time to improve your credit scores, reduce debt or save additional down payment. If there is incorrect information on your credit report you also will have time to get it corrected before you buy.

By starting your work now you can be very prepared for the Spring market and avoid the typical last minute rush, saving yourself time, money and energy.

Look for a good investment not a deal

RE/MAX Action Real Estate — Mon, 08 Oct 2007 10:49:46 -0500

Everyone wants a deal in real estate or as it's been called - "the price of a lifetime." Many home lookers won't even make an offer unless it is tens of thousands under the asking price.

My advice to this type of buyer is look at the house and its potential long-term resale.

You never know how good of a deal your home was until you one day sell that home. If the goal is to make as much appreciation as possible then focus on the house and not the price.

Real estate is essentially supply and demand 101. The better demand for your home the higher the price. The worse demand, the lower the price. Buy a home that a lot of people would buy and that may not be the home with the lowest price.

Homes backing up to busy roads are usually priced much less than homes inside of neighborhoods. However, the vast majority of buyers will not even look at this type of a home - regardless of price. These homes will look like deals on paper but they tend to appreciate at a rate less than homes on so-called "prime" lots. The same can be true of homes that have some of these none-curable characteristics:

Too much elevation from street to house - unless you are in a very hilly area, sloping driveways/yards are turn offs for most home buyers. They are hard to maneuver in cars - particularly in reverse - and the thought of a child wheeling out of control down a hill is more than most parents can stand.
Little to no rear yard
Corner lots - the lack of privacy really bothers most buyers
Fronting or backing up to busy roads
Backing up to power lines
Backing up to non-residential tenants such as shopping centers or gas stations
Bad room count - if it's a three bedroom in a four bedroom neighborhood or lacks a bath. Some times these flaws can be corrected making a bad deal a good deal.
Non-prime school districts. Sorry - buyers typically want to be in the best school districts which is why they'll pay more.
Adjacent to drainage ditches or spillways - not safe for the kiddies

If you are looking for deals try to look for homes that have been on the market a while and contain the following curable deficiencies:

Old paint or poor paint colors
Bad decorating
Poor landscaping
Poor carpet/flooring
Clutter
Lacking a key room that can be economically added. If homes typically have 2 full baths in the neighborhood and a home has one - can it be easily added?
Unfinished square footage that can be finished - in the basement or in the attic with hallway access via a stairway. Attics that are finished but walk up off a bedroom may add square footage but kills the use of a room.
Maybe it just needs un updated kitchen

If the house has been on the market a while and you can negotiate a good price, your willingness to correct the "curable" deficiencies may mean increased appreciation when it's time to sell.

Just keep in mind you will never know how much you spent on your home until you have sold that home. It's really very simple:

(purchase price + improvements) - future sales price = appreciation.

So if you bought the house for $150,000 and put $40,000 in to it your base is $190,000. If you sold that house for $230,000 you made $40,000. You might have bought another house that was thousands less but in the end you made less.

We all want a deal but use your head and look for a good investment.

Having your own agent is always a wise idea

RE/MAX Action Real Estate — Sun, 07 Oct 2007 09:44:08 -0500

If you plan on purchasing a home, the first step is to find a reliable buyer's agent who will help guide you through the process.

A buyer's agent is your agent and represents your interests.

If the property is listed the seller already has an agent who is looking our for his or her interests. You have the same right to your own representation.

While it is illegal for the seller and listing agent to conceal known defects about the house such as a leaky roof or faulty furnace, it is not required for the listing agent or seller to disclose many other items such as:

Information regarding adjacent parcels of land.
Information regarding whether anyone in the home had been killed or committed suicide.
The age of appliances and other features of the home.
What other homes in the neighborhood have sold for.
Whether or not there are registered sex offenders in the area
Whether the house had been previously damaged by fire or a storm (once the damage is repaired it is not a required disclosure)
How long the house has been on the market
Whether the property was listed previously by another agent
Whether or not there have been any price reductions on the house
information about proposed changes in school boundaries
information about proposed road or highways

Your buyer's agent has the responsibility to make sure you have any available information on the house, adjacent parcels, and the community. Your agent also will help guide you through the contract writing and negotiating process. He or she will help you understand the current market and whether it is a buyer's or seller's market. They should research the history of the house to find out how long it has been for sale, whether it's been listed before, and how much other homes in the area have sold for.

They will take all available information about market conditions in mind when they help you make a purchase offer. They also advise you about other information such as:

home inspections
obtaining a mortgage and getting pre-approved for a loan
home warranties
obtaining home owner's insurance
new homes versus resale
what makes good resale
writing the actual contract
what to expect throughout the entire process
obtaining an attorney or settlement service to conduct your closing
movers

A good buyer's agent is a valuable resource throughout the home buying process and beyond closing. The best news is that in most states, the commission earned by your agent is paid by the listing firm. While that money does come from the seller's proceeds at settlement, you do not have to pay directly for your own representation.

You buyer's agent may ask you to sign a "buyer's agency" agreement. This is the document that outlines their responsibilities and fees. Read the document carefully and make sure you understand the terms.

You might want to interview several agents before choosing the one who will help in your home purchase. To find an agent you can search the Internet, asks friends, or call a nearby real estate office. Make sure you check their credentials and ask for references.

Remember always get copies of everything you sign through the process and ask questions. Buying a house is a large financial undertaking, but having a good buyer's agent on your side can help make sure your money is well spent.

If you are moving why wait?

RE/MAX Action Real Estate — Sat, 06 Oct 2007 08:10:15 -0500

What is so bad with the housing market? Nothing!

Interest rates for fixed mortgages are historically low. Inventory is high. Sure we have seen the risky side of lending take a hit, but if you are a regular owner-occupant buyer things look pretty good on the buying front.

Now might be the best time for home buyers in years. There is plenty to look at. On the resale front you might actually have some negotiating room. On the new construction front, builders are making deals.

If you are looking to move up to a larger home, things are good too. I've had clients say they want to wait until next year to put their home on the market. My comment is that if you are jumping rocks within the same pond, why wait.

What does jumping rocks have to do with real estate? Well if you are selling a home within the same market in which you are buying think about this: If home prices rise in the spring - which they are likely to do - you might be able to sell your home for more, but you will also pay more for your next home. In fact, if home prices rise by the same percentage, the extra money your new home cost will exceed the extra money you made on your old home by waiting. So if the water rises in your pond it's going to rise around both rocks.

If the home you own sold this fall for $200,000 and the one you want to buy cost $300,000 and prices rise 3% by Spring, then you will sell your home for $206,000 in the Spring and buy your new home for $309,000. By waiting you might have cost yourself $3,000.

That does over simplify things, but the point is that waiting isn't necessarily going to help you. Fall/Winter is almost always a good time to buy. Better interest rates, less competition from other buyers, and this year a abundant supply of homes for sale.

And if you don't own a home already, buy before the end of the year so you can start increasing your income tax deductions.

Good luck and happy house hunting.

What did I just sign?

RE/MAX Action Real Estate — Fri, 05 Oct 2007 10:06:42 -0500

What did you just sign?

In the rush to buy a home, most people grant at best a cursory look to the documents they sign when making a purchase offer. Buyers typically focus on the offer price and closing date and pay little attention the rest of the contract.

The documents you sign when buying a home are important and do not always favor a buyer. There are many so-called "standard" contracts used in the Richmond area and the provisions within those documents can be as different as night and day.

Fortunately most buyers use a Realtor and have an attorney to advise them - but to play it safe - make sure the following provisions are in your contract:

Loan contingency: If you need a loan to purchase a home make sure the contract says your purchase is subject to you being approved for the loan. When a Realtor checks "prevailing rate" on a contract that means you are subject to any interest rate that is available given your down payment amount and credit. If your credit is poor or you have a small down payment you may be on the hook for any loan - regardless of the rate.

Home Inspection: You are responsible for hiring an inspector who will evaluate the over all condition of the house. Your contract should allow you to ask for repairs or a credit for repairs from items found during the inspection. If the sellers are unwilling to agree to your terms you want a clear and definite way out of the contract.

Property Owners Association Document review: If your purchase is in a neighborhood with restrictive covenants you should have the opportunity to review any documents regarding homeowner associations or restrictive covenants. A typical contract should allow you to rescind the offer at any point up until three days after receiving the property owners' association documents or restrictive covenants.

Personal property clause: Do not think that the curtains, washer, dryer, refrigerator, shed or any other item will stay. Make sure that your Realtor adds in detail any items that you want to convey with the property.

Termite Inspection: A typical residential purchase agreement requires a seller to get a wood destroying insect inspection prior to closing. Be sure you have an out if termite damage is found that causes you concern about purchasing the house.

There are other important items such as an appraisal provision, Megan's Law, well and septic inspection, mediation provision and more. There is nothing wrong with asking your Realtor up front to give you a copy of the contracts you will eventually be signing so that you can read them start to finish. If there are items that you do not clearly understand ask for an explanation. If you want additional language added to the contract do not be afraid to ask. Your Realtor and attorney are there to keep you out of trouble.

Buying a home is a big deal so make a big deal about knowing what you are signing.

How much will that home actually cost?

RE/MAX Action Real Estate — Fri, 05 Oct 2007 09:58:12 -0500

How much will that house actually cost?

When a buyer is considering making an offer on a home carefully consider not only the price of the home, but the five year cost of owning it.

Too many home buyers rush into their purchase without regard to what it will cost to own that home over the next five to ten years. The cost of replacing major components of a home can run into the tens of thousands of dollars.

Before signing the contract make sure you know the age and approximate remaining life on the following items:

Heating and cooling system
Roof
Exterior paint
Interior paint
Carpet
Hot Water Heater
Kitchen appliances

If a home seems priced high but its major components are relatively new then that home may be a better buy than one that is a few thousand dollars less but will need one or more major items replaced in the near future.

For example, if a home has vinyl siding it may be worth spending more on because a hardboard-sided house may require painting every 5-7 years at a cost of $2500-$5000 each time depending on the size of the home. The same is true of a home that has a new roof versus one that will need a new roof in a few years.

Also consider that when it is time to sell that home one day buyers will be looking at the age of the major items of the home.

Don't wait to the home inspection to find out that the furnace is 15 years old or that the roof needs to be replaced. Your Realtor^®should be able to find out the age of most components of the home prior to making an offer.

In the long run it might cost you less money by purchasing a more expensive house that has newer components than buying a less expensive older home that will need a lot of work. Your mortgage might be higher but you won't have to come up with thousands of dollars to replace a roof, kitchen appliances or a furnace.

Real Estate Advice

RE/MAX Action Real Estate — Thu, 04 Oct 2007 09:48:27 -0500

There are two types of sellers. Those who want to sell and those who need to sell.

You've gotten a new job in Tulsa and you have to move. You are now the type of seller who needs to sell. The problem is there are many homes for sale in your neighborhood that you will have to compete against. What do you do?

If you were the seller who wants to sell you probably would list your home at the same price the others are listed and hope for the best. However, you are the seller who needs to sell so you need a plan of action.

Step one: Assess the competition. I'm not talking about just your neighborhood but anything comparable in comparable school districts. Buyers don't usually just look at one subdivision - they often look at a broader area. You have to know where your home would rank among other homes for sale in some key areas:

1. Condition - do you need new paint inside and out? how's the landscaping? Is the roof near the end of its life? how about the appliances? Buyers are going to look at many homes and while price is a major consideration, so is how much that home will cost to upgrade and maintain. If your home needs updating then do it. It's not always about price for a buyer.

2. What has sold in the last 30 days. last 60 days. last 90 days. You better hope there has been some traffic.

3. What is the current inventory of homes for sale in your area? How long have they been on the market? Remember this is your competition.

4. How many homes in the area are currently under contract?

5. What is your home for sale vs. pended-home factor? To get this take the number of homes for sale and divide it by the number of homes under contract. The higher the number the worse for you? If your factor is 10 or less then that's good news because it shows homes are selling. Less than that means there is little happening out there.

Now that you know where you stand, it's time to price your home. If you take nothing else from this remember one thing: It never benefits a seller to stay on the market a prolonged period of time. Many people don't really care if there house sells. They are going to buy a bigger house "if" they get their price. If you have to sell then it's time you hopped aboard the straight talk express: "Price your home to sell."

Lets recap: Make sure you have updated your home and made it as appealing as possible. You have removed clutter. You have repaired anything rotted, broken, crocked or othewise messed up. You have assessed the competition. Hopefully you have found out that the market in your area still has a heart beat. Now that all the prep work is done - Set a realistic price.

Once you have done all that and gone on the market then your Realtor should have your home properly marketed. this doesn't mean a postage stamp sized ad in the newspaper. 80% of all home buyers utilize the interenet to view homes. Your MLS listing is the key to good Internet Marketing. The information in MLS is distributed to endless real estate websites. If the information is incomplete in MLS then the information on every site that shows your home will be incomplete. Your realtor can utilize virtual tours, numerous pictures, have dowloadable/emailable fact sheets and more.

Feedback is the next key. Once you have a showing, you want to know what the buyer and their agent thought about your home? Not all agents will give feedback but it is an essential tool in selling a house for a listing agent. Good feedback helps us discover thing that maybe we can change to increase the chances of selling the home. Calling for feedback also gives your listing agent a chance to close the sale if the buyers are on the fence and it's something we can deal with. For example, "my buyers really love the house but are concerned about the vacant lot next door that has a water retention pond." Well mr. buyer's agent, that lot next door was just purchased and the new owners are building a lovely brick colonial. The developer is going to fill the lot in with dirt and compact it."

You also have to track the buyers who looked at your home. If no one is buying that's one thing, but if they end up buying something else you need to now why.

Finally keep an eye on the market around you. Your agent should keep you up on all homes that come for sale, go under contract or reduce thier price.

If someone is going to sell it needs to be you. Be proactive, watch the market and listen to your agent.

Good luck!