Gregg's Blog

Size Does Matter in Florida Real Estate

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 07 Feb 2010 07:43:29 -0800

Size Does Matter in Florida Homes for Sale

Americans are downsizing to smaller homes. It is no secret that "Mac Mansions" are becoming out of favor. Here in Florida, and of course in our local Cape Coral and Fort Myers housing market, buyers are gravitating to more compact homes. There is high demand in the $100,000 to $300,000 price range. (Indeed the most unique small home I have seen lately was the Funky Fish House) .

There are emotional as well as financial reasons to downsize. People feel more secure in a cozy, well built, smaller home. Families are spending more time together than apart. We also get emotional security in economic trying times by not being extravagant, by conserving, by saving.

The economic benefit starts with the obvious point that smaller homes should cost less to build - although perhaps not less per square foot, the total cost to build should be less. There are also insurance costs, heating and cooling costs, and maintenance expenses that will decrease with smaller size.

When I was a kid I grew up in a small "Cape Cod" style home. The kitchen had a table in it and it was really the center of activity. One of us could reach the refrigerator door to get some more milk without getting up from the table. Back then the kitchen was the multipurpose room - it was compact secure, and indeed I have nothing but wonderful memories of being in that kitchen. Home designs today are gravitating toward recreating that secure memory.

Here are some design tips to help achieve intelligent design in a home to achieve a downsized living space

Reduce air-conditioned space with the effective use of outdoor space. Here in Fort Myers we are uniquely qualified to extend our living area to the outside of the house. We can have screened porches and gardens. Entire walls can be made of sliding glass doors that pocket away and expose the porch. Roll away hurricane shutters can be installed along outer screen walls to create security and usable living space in the colder months. This space is not included by the taxing authorities as air-conditioned space, but in fact is almost as usable as space that is air-conditioned with proper design and orientation to the sun and effective use of hurricane shutters.. When Gail and lived at Harbour Isle, a mid rise condo project in south Fort Myers, we had shutters installed on our Lanais. We shut them when ever we left the home, allowing us to prevent rain and dust from harming the full set of high quality outside furniture that we kept there. In the winter , for evening parties, we could lower the shutters and with the pocket glass doors open, this space became part out our living area.
Eliminate Superfluous Space. Sitting areas in bedrooms, hallways, and defined transition space are all areas that can addressed. While bedrooms can still be comfortable, more attention to closets and storage will have a greater benefit than extra sitting area in a bedroom that may be duplicated elsewhere in the home.. Hallways should be eliminated by designing the home off a central core. Transition space can be achieved by décor, color, carpets, and ceiling heights instead of requiring additional square footage.
Share Space. In a home not all rooms are used all the time It's impossible. It should be an easy matter to share, for example, a little used guest room with an office, a dining room with a living room, or an entrance way with a sitting parlor. Most families do not need two separate living areas, one where you greet the insurance agent and one where you entertain family and friends. How often do you use your living room?.
Built-ins. From offices to laundry rooms, to beds hidden in the wall, the possibilities are endless. In the kitchen, cabinets should go all the way to the ceiling for little used items. Some kitchens now come with removable panels at the kick plate for additional storage (common in Europe). Flat screen TV's have removed the need for bulky TV cabinets and can now be built in.
Flow. Visual flow is important in making small home seem larger. Eliminating visual barriers also allows you to share space from one use to another - like a dining room and family room or kitchen and an entertainment area (bar). The elimination of hallways makes traffic flow critical - the use of light, transparent furniture and the visual targets or magnets like well lit alcoves or art is helpful

Gregg Fous

www.marketamericarealty.com
GFous@marketamericarealty.com

Florida Prices at the Botttom? An Affirmation

Gregg Fous (Market America Realty and Investments, Inc.) — Sat, 06 Feb 2010 06:39:01 -0800

THE AFFIRMATION: "THAT SUIT LOOKS WONDERFUL ON YOU"

There I am standing in one of those mirrors that as a kid I would play in and stick my head into and look at a zillion of me. You know the ones, tucked in near the fitting rooms at Bamberger's or Macy's. My mother would bring me shopping with her and leave me outside the dressing room as she was in trying on dresses. I think I actually saw the back of my head for the first time in one of those alcove mirrors. I could move my arm over my head and simultaneously see a long line of kids that looked just like me move their arm as well. To this day I can't walk past one of these alcove mirrors and see a kid in there without thinking of my childhood. Today, however, I was sucking my stomach in and only looking at me in the middle mirror. I was test driving a new double breasted blazer. The salesman was behind me brushing off an imaginary piece of lint.

Then he said those important words, "That blazer looks wonderful on you." Then another sales associate "happened" to walk by behind me and she offered, "What a good looking jacket; very slimming on a tall man like you."

"I'll take it" I announced. That little push was all I needed: The affirmation; the expert opinion; the clincher.

In real estate sales we are often reticent to make that affirmation to the client. The sales people that do make that affirmation make the sale and build the relationship. Those that don't, will not.

I was discussing the "That suit looks good on you" technique with my wife Gail. She told me that if she heard this from sales person in real estate, she would automatically recognize it as sales fluff. I then explained more about what I felt was a necessary process from an expert sales person.
The sales person in the men's store sell suits all day long. He dresses well, knows style and recognizes a good fit. In fact, I admire the way he looks. When he tells me it fits well; I believe him. When he tells me it looks good; I believe him. Perhaps he built my trust in him over the time he took to ask me questions about my likes and dislikes. He has picked out a few jackets for me to try and solicited my opinions. Bottom line is: I respect his opinion and I want his opinion.

In real estate, as buyers, we need and rely on our professionals. A professional gets to know his client and his objectives and likes and dislikes. But more importantly, real estate professionals are already given a status as an expert - even on the first meeting.

Let me give you an example; and this is the one I relayed to Gail. A customer came into our Market America Relty and Investments property shop this week. He and his wife were looking for a three bedroom house on a canal with a pool as a second home. They were here visiting from Canada. They had already visited Sarasota and Punta Gorda and now wanted to tour our Fort Myers and Cape Coral. (They, in effect, had tried on two suits and were looking at a third). One of the Market America Real Estate agents spent some time with the couple and then affirmed in a very positive manner, that canal homes in Cape Coral were an excellent opportunity for them and that Cape Coral was a superb choice. She knew this because indeed she went through the same process looking at Punta Gorda and Sarasota and she indeed had settled here and loves it!

Now if the agent were to take the very neutral position of, "Let me show you around and you make the choice, " she would not have been as helpful to the clients as she was in making the affirmation. The clients wanted the affirmation.

By the way, have you ever heard a waiter tell you, "You made a wise choice sir."? This is also an affirmation that we appreciate. After all, the waiter serves this food all the time and should be an expert.
Understand that I am not talking about sales fluff here. I am talking about being confident in your opinion, your expertise and your product. If the customer does not look good in the suit, tell him so.

Also, a sales person should not offer expertise where he does not have it. It would be unwise to say you are really going to love this area within the first minute of meeting someone. After all, you have no idea what they love or do not love. What is fair to say is that YOU love this area, and it is the area that YOU chose. In the commercial arena things are actually quite similar. Selling commercial real estate and investments is an area that I spent a great deal of time on. I also buy investment properties myself. I learned a long time ago not to judge the suitability of an investment for someone else until I know their criteria; but my enthusiasm for an investment property is very apparent to my client. It is easy to share my expertise, but dangerous to impose my investment criteria on my client. What may be good for me may not be good for him. But I can affirm his decision and I can validate his thought process.
Now IS the time to buy. Now is the time to acquire investments and your second home. But be patient. Yes asking prices may go down a bit further in some sectors,, but SELLING prices are at bottom

For Video Version Click Here

Gregg Fous
gfous@marketamericarealty.com
www.marketamericarealty.com
800-439-1580 ext 52

Oasis Condominiums of Fort Myers Bulk Sale

Gregg Fous (Market America Realty and Investments, Inc.) — Tue, 02 Feb 2010 21:21:36 -0800

Oasis Condominiums of Fort Myers Bulk Sale

Bank of America is attempting to get offers, through a listing with Colliers Arnold, for the notes due to them for the Oasis Condominium project in Fort Myers.

Market America Realty and Investments has reviewed this opportunity and believes that this is a worthwhile opportunity and properly structured can return up to twenty percent per year.

To get a full package you will need to sign a CDA agreement. What follows is a summary based on knowledge gained outside the offering.

From the Related Group Web site:

Oasis of Fort Myers, Florida is a17-acre tropical development on prime waterfront property in the downtown historic area of Ft. Myers, residents find true resort living with all the advantages of an elite, private club. The two- and three-bedroom residences, which range from 1,000 to 1,850 square feet, feature floor-to-ceiling windows with glass railing balconies, marble and granite countertops, walk-in closets, stainless steel or wood-paneled top-of-the-line appliances, state-of-the-art designer finishes, imported Italian cabinetry and high-speed Internet service. A unique, private sanctuary, Oasis will feature access to the river via a marina with wet slips, a boat ramp, kayak and canoe storage, five infinity edge swimming pools, a tennis center with pro shop, and a boardwalk along the waterfront area. The community will embrace a private club lifestyle consisting of a poolside "river club" overlooking the Caloosahatchee with alfresco dining; an elegant 15,000-square-foot multi-level clubhouse, health club and spa, billiards room, private movie theater and tropically landscaped picnic point with barbecue facilities.

The Opportunity

The project consists of 440 condominiums in two towers. Approximately 15 have sold and closed. Approximately 60 are rented. Rental rates are about $.85/sf/month. The condos are complete with appliances and flooring.

The acquisitor will buy the note and negotiate with the owner for "a deed in a box".

There is no minimum price set by Bank of America although it is my opinion that it will sell for a price between 35 and 60 million.

Carrying cost, without taxes, is about $80,000 per month. Total rentable or sellable square footage is about 600,000 sf.

Ay empty condo tower may have problems with moisture, plumbing, and mold. The acquisitor must allow sufficient due diligence time and money for full unit by unit inspections of all homes, mechanicals, elevators, windows, and common areas. Code issues, fire inspections issues, and electric need full attention.

We have developed an exit strategy for Oasis, and are interesting in working with potential buyers interested in local experienced professional guidance on the development issues, the sales and marketing issues, and the management issues.

We recommend a three year hold program.

For Further information, please contact Gregg Fous, Broker/Owner, Market America Realty and Investments, inc.. .We do not represent the seller or the bank in this opportunity but will represent the buyer.

GFous@marketamericarealty.com

Gregg Fous 239 - 851.5464

Why would you go out shopping for a house without an iPad?

Gregg Fous (Market America Realty and Investments, Inc.) — Thu, 28 Jan 2010 04:36:43 -0800

Here is the iPad Video Presentation for the iPad

I have a Market America Realty and Investments Inc, branded real estate iPhone application for house hunting. It shows an aerial map with all the listings on it, it knows where you are and has full pictures and listing details Imagine it on the iPad! Why would you go out with an agent without one?

Offices in Fort Myers, Caep Coral, Naples,Punta Gorda, sarasota, and Orlando

Gregg Fous
www.MarketAmericaRealty.com
GFous@marketamericarealty.com

A SINGLE LOG MAKES A POOR FIRE

Gregg Fous (Market America Realty and Investments, Inc.) — Wed, 27 Jan 2010 02:02:57 -0800

I like the energy that exists in my office. So does everybody that visits us. It is an exciting place to do business. I believe the reason for this is simple. We hire energetic people that have a common purpose; We love our profession and we believe in what we are doing. But the energy comes from working together, a single log will soon peter out if ignited, but many logs burning together will make up a wonderful fire.

When I first started my own business in a suburb of Cincinnati I worked out of my own home office. I would get dressed for work, go into the office and shut the door and work on the phone and PC all day (keep in mind this was 1986).

At the end of the day I would emerge and my two children, Nicole and Christopher, would both chime up, "Did you make any money today Dad?" I remember the question very clearly, because it cut to the chase. I don't remember the answers as easily. (Someone said we soon forget pain). Those were very formative times for me. Fortunately I soon realized that as energetic and confident as I was; I was not going to do as well by myself as I would with other energetic people around me. I would peter out.

Today no one would deny that my energy level is very high. But it stays high because of the company I keep. Unlike large nationals, Market America Realty and Investments is not in the business of real estate agents. We are in the customer service business. The national real estate companies make more money by having more agents. We make more money by serving more customers.

In order to be successful in the real estate customer service business we have to know many facets of the business and know them well; from property values to community locations, from finance to insurance, and from construction methods to appraisal techniques. In the investment areas we need to know how to look at a profit and loss statement, the difference between a cap rate and a debt service ratio, and we have to be able to teach this to our clients.

During all this we are constantly looking for people to serve. (Lead Generation) Those of us that are experienced get most of our business from referrals.

High energy is essential as this is a very fast paced business. The phone does not stop ringing (thank goodness) and each client wants immediate and thorough attention.

When choosing a Realtor to work with, don't choose a "single log", though superstar they may be. Today's clients have needs that are complex - they need an entire company working for them and they need a company to work for them that has the team leaving work whistling - not grumbling and glad to get out.

Try us; we think you will be pleased.

Gregg Fous

Oasis Condominiums in Fort Myers - Project being sold in Bulk

Gregg Fous (Market America Realty and Investments, Inc.) — Wed, 27 Jan 2010 01:45:20 -0800

Oasis Condominiums in Fort Myers - Project being sold in Bulk

January 26, 2010
The lender for the Oasis Condominium project developed by The Related Group that was built by BBL of Florida is offering the notes for sale. Apparently the lender for The Related Group has negotiatied a deed in leu of foreclosure and the buyer of the notes will be able to take over the 423 unit project quickly once a deal is struck for the notes.

This High Rise Project consists of two towers and a total of 423 condos - and less than 24 are sold, about 60 are occupied through a rental program.

Market America Realty and Development has developed an exit strategy for the buyer of the notes. To learn more about our development group please click (Market America Realty and Development Group Work Out Sales Division). We believe this project has merit and offers a unique opportunity to due its location and the large number of unsold condos.

Gregg Fous has close connections with BBL and we have been wathcing this project for some time.
Once a Confidentiality package is executed on the Oasis Condominiums High Rise project in Fort Myers we can discuss tan exit and acquisition strategy with the buyers.

To see a review of the price per square foot of all Downtown Fort Myers High Rises please visit (Fort Myers Downtown High Rise Sales Review)

Market America Realty Services for The Oasis Condominium High Rise Project or other Bulk Purchases New Developments

Being on the inside track is our middle name; Realtors call us for information on new and pre-construction properties. Through our visiting all the properties and interviewing all the developer's sales agents we are able to get detailed information for our clients so there are no surprises during the transaction process.

· Define objectives and Goals

· Identify, Acquire and entitle land

· Define product

· Coordinate architects, engineers, and contractors

· Manage project from concept to sell out

Rework Developments

Fous and his team consult on acquisition and disposition of troubled assets. We believe that the exit strategy is more important the acquisition strategy.

To accomplish this we can provide:

· Full existing market analysis

· Repositioning studies

· Absorption Studies

· Presentation of Auction and bulks sales exits

· Set up and train sales team

· Prepare an advertising budget and plan

· Prepare financial statements and cash flow analysis

· Make presentation to investor groups

Gregg Fous 800-439-1580 ext 52
www.marketamericarealty.com

Lease Options and How They May Work For You

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 10 Jan 2010 08:06:42 -0800

Lease Options and How They May Work For You

It may just be a lease option that will enable a seller to attract a future buyer to their home and enable buyers to afford to buy in this economy.

I always use an attorney to draw up a lease option agreement. I usually pay under $500.00. There are three components to the lease option:

•1. The Option Agreement

•2. A Buy Sell Agreement

•3. The Lease.

In most situations the option agreement and the lease are executed (signed) by both parties, and the option agreement will refer to an attached buy/sell agreement and it's agreed upon terms. The essence of this transaction is that the buyer agrees to buy an option to purchase the home at some future date at either an agreed upon price or an agreed upon formula to arrive at a price. This agreement is executed along with a lease for the property.

Let's look at a real life example:

Seller Bob is retiring and wants to move from Fort Myers and sell his waterfront home and move to a smaller, less expensive retirement home. Bob has two mortgages on his home totaling $600,000 that cost $7500 a month including PITI. (Principal, Insurance, Taxes, and Insurance) His home has been on the market for almost a year and was originally priced at over one million dollars. He is current on his payments, but his income is well below the $7500/month cost and he is eating away at his retirement nest egg every month he owns the house.

Buyer Ralph and his wife have a large home that has $200,000 more in debt that the house could reasonably be sold for. Ralph and his wife own their own business, have children and have good income. They have stopped making their mortgage payments. Their credit is bad but their income is strong and steady.

Ralph agreed to lease Bob's house for $7500/month and pay $20,000 to buy an option to purchase the home in two years. $2000 of each monthly rental payment will be applied to the purchase price as will the option monies.

What do Bob and family get? First of all, they get to move into a house, on the water, for very little down payment. They now have locked in the price that they will have to pay in two years (Keep in mind this is an OPTION, if prices continue to plummet, they do not have to buy - it's their OPTION). (Note - I am not disclosing the price, and will not until it is sold, but it was well less than the $1,000,000)

Bob gets a tenant in his home that will treat the home as his own, he breaks even on his monthly payments - and gets some tax advantages as well at tax return time.

I was able to negotiate for these folks that the amount of the lease payments would be the interest payments on the two notes (the rates are fixed) plus insurance costs and taxes. We all expect these costs to go down over the next two years, and the monthly payments by Ralph will adjust accordingly.

The option money, by the way, was split between the owner and the broker. When the home eventually sells the commission will be the same as per the listing agreement, less the commission paid from the option money to the broker at the inception of the lease. There was no lease commission.

I love a deal where all parties are happy. Bob was happy because he got out from under the drain of cash flow loss. Ralph and his wife are thrilled because they were able to negotiate a good price at today's depressed market values, and lock in a home they love.

(This was an actual lease option we negotiated on behalf of our clients; some of the details were changed to protect privacy).

If you are thinking or buying or selling on a lease option, talk to us, we can help. Here are some caveats that you must keep in mind and have your attorney address in the agreements:

•· Potential default by the owner/lessor on the underlying mortgage.

•· Maintenance Items - who is responsible for what.

•· Amount or rent applied to Purchase Price - if any.

•· Remedies for default by Lessee.

•· Insurance and tax issues.

Gregg Fous

239-851-5464

GFous@MarketAmericaRealty.com

My Own Ten Rules of Real Estate

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 22 Nov 2009 11:59:37 -0800

You make money when you buy, not when you sell. Take your time buying. You only get once chance to do it right. This is the time you get to decide on the price. When you sell your buyer will decide, and many times you cannot control when you have to sell - but you can always control when you have to buy.

Always look at the alternatives. Once you have made a decision, take a step back and look at all the alternatives once more. For example. If you have settled on an offering price for a property - look at all the other options open to you to for that same amount of money

Cost has nothing to do with price. For further clarification, see point one. What someone has invested in a property has no bearing on what some one else will pay for it; likewise, if someone inherited a property for free - they would no sooner give it away nor would a buyer pay more for a house that someone paid $400,000 for when an identical home can be bought for $150,000. Also: look at the cost of ownership, not the price of buying. This means issues like maintenance, taxes, and HOA fees.

Leverage is a beautiful thing. Paying cash has its place, just not in investment real estate. If I buy a $100,000 investment property with 20% down ($20,000) and the value of the property goes up 2% in one year, I just made 10 percent on my investment.. If I paid all cash, I only made 2%.

Look for the worst case scenario - the big, "what if?" If you can sleep with a worst case scenario - move forward. My long time attorney, Jack Donenfeld once told me it was his job to figure out what possibly could go wrong with a contract and then prepare for it in advance. As an investor, it is my job to figure out the worst thing that can happen with the property and the investment and see if I can still live with the consequences.

All real estate is local. Do not apply national trends, or even state and city wide assumptions, to a local real estate deal. The really cool thing about real estate is it's unique nature and flavor. A few weeks ago I talked about how one retailer could succeed on one city corner and not another. Know your local real estate

Buy Real Estate - they are not making any more of it. Here in Florida this is certainly true of waterfront land. I would also expand this to another rule - buy unique. By the top, the end, the view, the one with the big lot. Always strive to differentiate your property from another. I always tell condo buyers to buy the highest and best that they can afford.

People don't buy a house, they buy a home. Sounds trite, but it is true. If you can get a customer imagining himself fishing off the dock with his grandson, or cooking in the kitchen with her family, you are now relating to the buyer. The number of square feet is meaningless if the customer can not relate to the home.

Quality endures; Poor quality is expensive. Small well built homes will always hold their value longer than large poorly constructed homes. Same thing with rental property. If you are buying sight unseen, you better read the specifications.

Consult an expert, but make your own decisions. There are many professionals out there, and they all have their place: home inspectors, real estate agents, accountants and lawyers; use them wisely, but remember, at the end of the day - only YOU live with your decision.

What's that house worth?

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 01 Nov 2009 11:32:45 -0800

I have heard some version of this question over and over again, from different people, at different times, and all the questioners expected a definitive answer. I shall attempt to discuss worth and value and will try to simplify the discussion and give you some food for thought. First let's get to the most practical reasons people ask this question in my business. They either want to know:

How much can you sell my house for? ,or

How much do I have to pay for this house?

These questions actually go to price, and the short answer always has a dollar figure.

BPO's

In our office we are doing at least a dozen BPO (Broker Price Opinions) a week. A BPO provides the answer to this question: "based on the sales of similar homes in close proximity to this one over the past three months, what will the subject home sell of within 30 (or 90) days?" (for a blank BPO form click here).

The BPO form will also list three homes that are on the market, but in truth the ask price that some has on a home has little bearing in today's market valuation. A BPO price is generally brutally honest and generally is referred to for a quick cash sale. The BPO's in our office are performed on homes we list that have been foreclosed on by the bank and the bank is asking us to sell the home.

Alternatives

In general real estate sales, we are more likely asked: What can you sell my house for? We may start with a BPO. But we have to ask more questions: "How soon do you want to sell? Will you hold the mortgage? What is included?" In previous uptick markets sellers would "lead the market". They would price a bit higher and wait for the market to catch up. In today's market this might be a bit like trying to catch a falling knife. Most agents will look at what alternatives a potential buyer has to buy a similar house - not what one has sold for. If a buyer wants to live on the river in Lee County,for example, the agent will look at all the alternatives on the river and then price the subject home to be competitive with what is on the market.

Are you going to sell and then buy?

Some sellers today are thinking of downsizing. They want to put their home on the market and buy a smaller one. The wise seller will set his price to sell quickly, foregoing a higher price because they know bargains exist on the buying side. Unfortunately there are many who want to "sell retail and buy wholesale. They realize it's a down market but rather think that the down market does not apply to their home! In their wait for the perfect price for the home they are selling they may miss the bargain on the buy side.

What is in a price?

I have often said that there are three forms of capital: Time, Money and Thought, and I have a limited amount of all three. The money issue is the most up front and center. Let's look what is involved in the dollar cost of a home. The following is a list, in no particular order, of factors that affect the dollar cost of a home:

Purchase price
Insurance Cost
Taxes
Maintenance
Home Owners/Condo Dues
Useful Life expressed in years (Depreciation)
Cost of Borrowing
Utility costs

If a buyer or seller just looks at the first one, price, and ignores the rest, they are not examining the true costs.

Less obvious than the dollar costs are the time and brain power costs. You may think of these as the same thing. I do not.

One deals with the clock - how much actual time it takes to accomplish the search for a home, the maintenance of a home, and what are the alternatives for that time; the other deals with stress and cognitive power. If I am stressed with the burden of my home ownership, this will steal cognitive power I have for accomplishing other things - like my livelihood and my enjoyment of my family.

And what of Intrinsic value?

I am not talking of present value as in an investment, but more the philosophic intinsic value of a home and its contribution to happiness. The expression "You deserve this" comes to mind. The home is a reward - but only as it is related to happiness - not the number of square feet and bedrooms. What is the price for happiness? What is the cost? For this answer you must examine your bigger goals in life. I, like many others, have re-examined these questions and find that worth has more to do with the intrinsic values that the dollar values.

Gregg GFous@MarketAmericaRealty.com

Trends to watch for and profit from:

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 11 Oct 2009 11:06:23 -0700

Pets. This is a market that the recession has missed.. Yes we see anecdotal stories about abandoned pets as folks abandon their homes, but look to the steady growth of the pet industry to continue for years to come.
The Kitchen. Nothing says comfort more than a home cooked meal. Grocery prices are rising and restaurants are responding to the lack of customers. But look to home cooking and products related to dining in to increase in popularity.
Small is the new Big. At the economy shrinks, so will home sizes, cars, and furniture. Look for pride in small ownership and capitalize on it.. Small multi use furniture, easy to store playthings, and of course small electronics, small apartments and small cars.
Out Sourcing. This is corporate speak for do not hire an employee, but contract out for the service - from everything from your phone service to your software. Need a marketing department? Outsource it.. Need a call in service center? Outsource it. Here at Market America Realty and Investment Group we have outsourced our phone services, our IT department (Redline Managed Services), and our email system. We, in fact, out source our offices.
Software as a Service. Related to the outsourcing trend. Instead of buying the software buy the service. Need accounting, CRM, or inventory systems? Get it on the web.
Aging and Dying. We don't need to say much here, the baby boomer theme has been beaten to death - and that's where they will end up - think Bucket List and the package of products and services this aging population will demand. from medicine to vacations, parties to funerals.
Water - blue is the new green. Technology and marketing opportunities will increase as our demand for this precious commodity does not decrease but the supply dwindles. Thin water treatment and conservation.
Urban living. The Aging population will no longer want to live an hour's drive from essential services. Small efficient apartments in urban locations near libraries, hospitals and shopping - not to mention transportation. This trend runs perhaps contrary to the extended household trend -multi generational households. But the sprawling suburbs are expensive and impractical to support. Urban living gives us other markets to explore - smaller furniture designs, urban gardening, indoor pet potties, multi use appliances and compact EVERYTHING.
Home businesses. As the population loses corporate jobs look for more cottage industries and the products to support them.
Communications. Think social networking, computers in pocket (iphones) connect anywhere technology and the demise of the newspaper and printed media.
Virtual everything. Tour a home or a country, take a hike or fly a plane.
Shopping. Look for personalized manufacturing - order a car and they will make you a car. Order a pair of jeans, and then it will be made for you: Low inventory, the resurgence of catalogue stores - tied to the internet. A place to touch the product before you go on line to order it, not a place for inventory.
Medicine. The coming socialized medicine trends will boost the concierge medical industry, holistic medicine, and preventative care.
Aging infrastructure. The crumbling bridges, sewer lines and utility networks will favor the urbanization trend and the infrastructure per capital is lower in the cities.
Alternate fuels. Think annually renewable fuel sources water, sun, wind. Think growing polymers in plants.
Do it Yourself resurgence or everything - from home improvements and cooking to wills and clothes making. The population will produce more and consume less.

Five Things You Need to Know about a Condo Before you Buy

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 27 Sep 2009 09:25:30 -0700

Who IS the developer? Florida has a very strict successive developer law. The developer that is responsible for warranties and liable for other major issues just may be a bank or some other investor and not the large developer that built the project. Investigate this thoroughly and get a good agent working on your behalf that can intelligently get these answers and advise you of the ramifications.
Who is carrying the warranties and what is the policy on warranties for things like appliances, punch out items for the condo and major structural items such as concrete and doors? Many of the subcontractors for things like the pool, the concrete work, and the tile may now be out of business. If the condo you are buying is three years old yet has never been lived in, is there still a warranty? Who do you call if when you move in you find that the hot and cold water lines were mistakenly crossed or your doors don't work?
How many condos in the community are paying their assessments? If you buy a condo for $179,000 and the condo fees are $900 per month it is a safe bet that only a small portion of the condos are actually paying the condo fees. How does this affect you? What will the fees be in two years? In five?
Who built the condominium? This is different from who developed it. Are they still in business? What is THEIR policy on latent defects? Do they have the money and resources to back up their warranties? A good agent will contact the builder for you and get these answers.
Who is managing the condo association and has the project been turned over to the owners from the developer? The condo association is likely very busy with issues like un collected fees, estoppel letters for foreclosed properties, and other problems associated with today's recession; so to get answers from them you may have to make a personal visit. I would do so or insist that your agent do so on your behalf. You can learn a great deal about issues like insurance, warranties, the percentage of owner occupieds and other problems or challenges the community will face in the future. Most associations are run by a management company that is paid so much money per month, per door. They hire the common area maintenance contractors and deal with all items not associated with the individual homes.

The Longer the Drop the Higher the Bounce?

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 27 Sep 2009 09:23:07 -0700

The Longer the drop, the Higher the bounce?

Two weeks ago I received and email from one of my readers telling me that he was glad I was a salesman and not an economist. My writings and indeed my attitude were much too optimistic for me to be an economist. I wrote him and thanked him for his email and comment. I agreed with him, I would rather be thought of as an optimist than anything else.

I was reading an article in the Wall Street Journal last week and read something to the effect that all of the United States recessions have been followed by much happier times, and the deeper the valley the higher the following hill. I cut out the article, carried it around with me for a while so I could refer to it when I write on Sunday morning. But I lost it. I probably scribbled a phone number on it in the car, carried it to the office, and lost it before I called the number back.

No matter. I really don't need the validation of the Wall Street Journal to confirm what I am seeing with my own eyes. But I suspect there may be a bit of a perspective issue with the higher the bounce from the longer the drop theory.

My father used to tell me the story about Herbert, the philosopher. He came upon Herbert one day in his garden. Herbert was beating his head against the stone wall beneath the oak tree in the corner.

"Herbert!" exclaimed my father, "Why are you beating your head against that wall?"

Herbert stopped, looked up at my father and said, "Because it feels so good when I stop."

Today, belts have been tightened, literally, and spending is at an all time low, we have all cut back, economized, and retrenched. The clouds of excessive consumption have cleared and our minds have adjusted more clearly so that we can perhaps more wisely choose between needs and wants. I know my priorities have been altered, and I believe permanently, by this recession.

We all seem better able to gauge others by our own experience and I am certainly no exception. My experiences lately tell me that spending is on the increase. In my business we are expanding. I now have 14 agents and two staff locally and twenty or so more agents nationally. I am interviewing for an outside contractor for marketing. I bought additional capital equipment. I am spending money on my website and some money on advertising. Yes, just a trickle, but it is a start. But I am spending the money differently.

We added affiliates and now have Market America Realty and Investment Group - with offices in Punta Gorda, Sarasota, Michigan, and New York and soon in Germany.

But instead of adding employees I am in many cases outsourcing. Instead of long term commitments I am more conservative in my approach, cautiously optimistic, if you will. My PR person will be an independent contractor; so too my content manager on the web.

My affiliate program is another example of a fiscally conservative approach. I have identified technologies that make my business run smoothly, but for growth in my business I am taking an approach my brother I used "expanding" our boats.

Bill and I used to buy a boat with partners. Every time we need to spend money on the boat it would cost each of us just one fraction of what it would cost us if we owned the boat by ourselves, with three partners in the boat, that new prop was, in essence, 2/3 off.

The approach I am taking for Market America Realty and Investment Group is similar. It is a marketing Co-op, so to speak, I am adding offices, but not expense. I am adding technology, and the expense of that technology will be shared among affiliates. Now each office can afford the best support, advertising, and back office systems at a fraction of the cost for a single office. (The beautiful thing about today's technology is the low cost of scaling it for large growth. If you have a real estate office and want to talk about being an affiliate, call me).

The point here is that we are spending money again, but in a fashion that has been adjusted by our experiences in the recession. I think there will be a bounce, but it will only seem higher because of our adjusted expectations and our new found appreciation for any upside at all.

Folks, I am amazed at the prices, not just a Riva, but all over. We are now at that time that is just at the end of the long off season for sales and the beginning of the new selling season down here - and prices are remarkable. In some cases as low as 40% of that they once were. Riva is in an unusually location - only unusual because they uniquely own the high rise market in South Fort Myers. Views are spectacular both day and night, the amenities are high class.

The individual condos do not have the layout and finish that Parkside does (Parkside is all granite and wood trim) nor the marina, of course, but the amenities are done well.

Five things I wish other Real Estate Agents would do but most don't

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 27 Sep 2009 09:20:20 -0700

Five things I wish other real estate agents would do, but most don't

Identify themselves as agents when they call.
Put their contact info on all their contracts so if I need to call them I can.
Have a pre programmed signature for all their emails so if I have to respond quickly by phone, I can.
Learn how to scan a document to when you send it is not upside down.
Read and fill out attached addendums to contracts

Just my comments, on the side.

How to Buy a Foreclosed Property

Gregg Fous (Market America Realty and Investments, Inc.) — Tue, 15 Sep 2009 01:01:53 -0700

I'm sitting here this morning looking at, what in today's computer dominated world, is a blank sheet of paper: a white screen with a blinking curser standing at the ready, waiting for the words to come out slowly and with deliberation, originating from a brain that is anything but slow and deliberate; a brain that is sending signals faster than my poor typing skills can keep up. It seems that it would be so much easier if my brain had a USB port I could plug into and it would transport my ideas into some user interface with Microsoft Word. Before you tell me about speech recognition: I know, I know - I tried it. It simply does not work well enough. By the way, thanks for still reading my column. I try to keep the typos to a minimum - please accept my apologies for last weeks typo right in the subject line.

I have three topics I want to cover: How to buy an REO - a bank owned property that has gone through the foreclosure process and as now marketed by an asset management company though a local real estate agent; How to do a Short Sale - in effect sell your property for less than you owe the bank; and thirdly, I want to talk about One of my Greggisms that my kids have heard all their life.

First to the Greggism. This morning while I was reading the morning paper I had the TV on. The Fountainhead, by Ayn Rand was playing on Turner Classic Movies. The antagonist to Howard Rourk, Ellsworth Touhy, meets Rourk by chance at a construction site. For most of the book Touhy has been out to destroy Rourk, the protagonist of the novel and the representation of Rand's philosophy. Touhy is anxious to hear what Rourk has to say:

"So tell me Rourk. Tell me what you think of me." Asks Touhy.

"But I don't think of you." Rourk offers as he walks away.

Whenever I hear one of my kids or friends say: "I hate such and such, I always respond with, "Don't hate, just refuse to like, it takes much less energy."

I had never made the connection with my sentiment to Ayn Rand until this morning.

Not sure what this has to do with Real estate, but I needed to get it out my brain and onto paper so the rest of this stuff can come out. Enjoy.

How to Buy an REO

The topic is not how to find an REO to buy, nor is it how to determine what REO to buy. If you need help with these topics call me and let's sit down. What I want to talk about is how to get the one you have identified.

Buying REO's is not like buying a home from an individual. You are buying from an institution. There are no grey colors; only back and white. It also is not a race. First does not count. Highest and best counts.

Let's talk about highest first. You need to be working with an experienced and thorough agent that can make you just as knowledgeable as the asset manager for the bank that is handling the decisions. The asset manager had at least two real estate agents prepare a BPO (Broker Price Opinion) for the subject property. You need to do the same. Do not hesitate to pay for these BPO's . You should be able to get them for $50 to $100 each. If you are a loyal client and willing to sign a buyers rep agreement with your agent, I am sure they will do one for you free of charge.

Let me take a moment and talk about buyer rep agreements. You might be hesitant to sign one; and you should be. I can understand how you feel, and I felt the same way when before I was an agent and I was using agents to do work for me as a buyer. But then over time I realized that good agents work hard and diligently and have many demands on their time. But I need his full attention and I need to let the agent know that his efforts will ultimately be rewarded. Do not hesitate to sign a buyers rep agreement - ESPECIALLY when dealing with REO purchases or looking for bargains in a very competitive market like today's.

Back to the BPO. The BPO will give you a good idea what the home is worth and what the bank will accept. Just like in any negotiation it is helpful to know the other sides' motivation. The bank's motivation is simple - Highest price quickly. They want simplicity and no contingences. They want to move onto the next property. Which is where we come to BEST:

Once you see the BPO for the property you want, ask for all associated documentation. A good REO agent will have things like condo docs, tax records, sales history of the property, and perhaps old surveys or inspections. Go talk to neighbors. Visit the areas a few different times of the day. Go on the weekend. Get to know more about this property than anyone else. Look at the short sales in the area.

Whenever possible make your inspection prior to the offer. Do not make the offer contingent on ANYTHING. Your competition may be a higher priced offer but may come with a seven day right to inspect. You may win the bid at a lower price if you have already done your inspection.

Many years ago I bought a house in Cincinnati from a bank. I looked at the property and decided what it was worth. I then found out that there were three bids higher than mine. I wound up not making the bid. Ninety days later, almost to the day, my agent came back to me and told me the bank called her and asked if I was still interested. It seems that all three of the other contacts fell though during the due diligence period. I told her I was interested but I needed to go through the house one more time. I took a clip board and assumed everything that might need to be fixed HAD to be fixed. I submitted my bid based on cost estimates for it all, but with NO contingencies for inspection or financing. The bank called me directly a few days later and said they would like to save some time and counter my offer over the phone. I replied that I could save them a whole lot of time as they already had my final bid in their hands. I got the deal. (By the way the only thing I did not have to replace that I thought I would have to, was the slate roof. It cost only $135.00 to repair.)

Ask your agent if there are any addendums that the bank needs signed and you can get ahead of time. Normally banks ask for proof of funds or your ability to borrow. Give them that information and make it easy for them to verify balances by including your banker's phones number and name.

Ok, you have your nice tight package that is now in the hands of the bank. Don't stop there. Follow up. Talk to the banker's agent. Are their other offers? What are they? How many? The seller's agent has a job to do - and that is to get the highest and best offer that he can get for his client. If it is in the banks interest to tell you that you are two thousand below the next offer, he may tell you that - hoping to get you up a few thousand. Many banks set a deadline for offers, after the deadline they come back again and ask for "highest and best" again. You may be able to pre-empt that process by having such a solid first offer that they take the path of least effort and accept your offer.

Do not be discouraged. The process is not as much art as it is science; but there are still personalities involved. Good agents know how to get to the personalities and make the deals happen, but excellent agents go beyond that and make certain that there are no other reasons for the contact to be thrown out by the bank. They will help you make a tight offer that is highest AND best. Good luck and good buying.

What's the next Superlative? In Real Estate I think it's Intelligent design.

Gregg Fous (Market America Realty and Investments, Inc.) — Tue, 15 Sep 2009 00:58:52 -0700

I'm sure it started out way before I noticed it as a kid. I'm talking about the battle of the better-thans. There was a Dairy Queen in Emerson New Jersey when I was a kid. As a treat my parents used to take us there for ice cream. When ever we came off of the Garden State Parkway from long trips and got onto Kinderkamack Road; there were two mansions up the hill to the left. When I saw those mansions I knew the Dairy Queen was not too much further ahead on the right. This was my signal to start my pleading for my Dad to stop the car. Little did I know he always wanted a DQ as well and his resistance was just a show for Mom.

One year we took the Country Squire station wagon, a pop up tent trailer, and headed all the way to Disneyland in California. But after four weeks and thousands of miles, I still spied those landmarks on Kinderkamack road as we got close to home.

Of course we stopped and Dad sent me in to get small four cones.

When I came back to the car I soberly announced that they didn't have small cones anymore. In fact the smallest was a large.

"Huh?"

"Yup: large, extra large and jumbo."

This morning I was sitting reading the paper over looking JayCee Park in Cape Coral from our new Parkside Condo. It was (and still is) a gorgeous morning. It rained pretty much all night and a cool soothing breeze was coming off the river through a cloudless sky. As I made my way through the news sections of the paper there were joggers, dog walkers, and some sort of workout club distracting me, in a pleasant way, from the news. When I got to the real estate section I scanned the ads. The first half page ad as is for Concordia Brand New Luxury Condos. This is a project that is near and dear to my heart. Before we developed the Island Pines project we looked at this design, which is a modification of the "BigHouse" concept but went instead with a more traditional design from Mike Sheeley Architects. These homes being offered by Concordia are at a price that is at least half of their replacement cost and very much a bargain. In fact at as low as $77,000 it would be a mistake not to take a look at them if you are thinking of buying a condo in Florida.

For Concordia, luxury is defined by granite counter tops and stainless steel appliances and screened lanais. Certainly a step up from laminated counter tops - but who builds laminated countertops anymore anyway? My point is not to disparage Concordia, for I think it is a fantastic project, but to point out that our benchmark, our starting block, if you will, is luxury. We go up from there.

To those who have been coming up from luxury; luxury is a bathroom with a cocktail bar, or a kitchen with under counter refrigerators and beer on tap, built in wine coolers and six burner gas stoves; inlayed marble mosaic floors, gold plated faucets, and walk in closets with windows.

Opulent, sumptuous, lavish; but where do we go from here?

I say to intelligent design. Not bigger, but better; not more luxurious, but smarter.

The trend will be to the small, understated luxury, No extra rooms, but those that are built are built with use and design in the forefront. Large closets yes, third bedroom suites no. I expect not to lose high ceilings and large windows but I expect higher quality storm and sound proof windows; practical use of the space with things like built in safes, smart storage design, efficient kitchen and bath design, and little or no wasted floor space, multi use rooms with built ins: Energy efficient and "Green". Proper ventilation for the baths and kitchens, "smart" electrical design with remote controls, sleep modes and temperature stable homes.

In any case that's what I want. And I want to develop this too. But first we have to sell all the luxury homes that are on the market at bargain prices. We need to finish this "clearance sale". Which raises another interesting point: today the "few steps up" from luxury in now available at affordable home prices. Money available at 5% and incentives from sellers and banks alike.

I am expecting a very busy season in real estate in South West Florida. Come on down for yourself.

www.ma-realty.com

What's Your Value Add?

Gregg Fous (Market America Realty and Investments, Inc.) — Tue, 01 Sep 2009 00:39:10 -0700

Figure out what the real estate wholesaler's "Value Add" is and you too can make money in Real Estate.

I'm not sure where I first heard the expression "Value Add" - I think it was when I was a consultant for the Corporate New Ventures Team at Proctor and Gamble. We were big on buzz words back then like; "ideation", " key take-aways"; "peel back the onion" and "30,000 foot view";- all sorts of insider expressions that let others know we really knew what we were talking about and we were, well, consultants. I have to admit I still use these expressions in planning meetings today, although my planning meetings are much more informal these days and are more likely than not to be held with a few small confidants like my wife and close business friends. But I still love to use a white board and dry erase markers. When I can write ideas down they become more concrete - and approachable.

The concept of "value- add" requires us to define not just our right to succeed in a project, but just what we are bringing to the table to justify a margin contribution. At P and G, I was taught that the conglomerates vast size and marketing muscle was not a right to succeed, nor was being first to market a right to succeed. A "value add" had to be present and sustainable, scalable and offer a benefit to each customer - not just to the market or to the companies bottom line. The soap, for example, had to actually clean better or last longer. This over riding concept has served the company well.

A few months ago I was approached by an old friend in the real estate business. He was suddenly gung-ho on a multilevel market concept. He invited me to a presentation at a local hotel. I went because of our past friendship. At the meeting he talked about leveraging people, not money, and selling to friends various products that they were already buying anyway: like satellite TV service, cell phone service, and vitamins.

I asked him simple questions; "What's your value ad?"

"What are you contributing to this process?"

He did not quite understand that not having a value add would ensure that his business was not sustainable. He stressed I did not really have to DO anything. Sales people down my stream would sell. I did not need a value add.

But I understand that in order for my customers to use me, the must need me for the added value I bring to the proposition.

Ok. Let's talk real estate,

Market America Realty and Investments Inc. is selling homes to wholesalers, end users, and landlords. The expression wholesalers is perhaps not the proper term, but if you wish you can call these folks flippers, dealers, or money men. The foreclosure deals we now handle bring in multiple offers in wide price ranges. (To the lower left there are links to our newest offerings - some before they are listed on the MLS - because we do not have final pricing). I can usually tell when the buyer will be an occupant by where the price of the offer is in relationship to other offers- but not always. The investors that are going to resell the property know they need to add value to the property, and they know well where their margins and therefore offering prices, need to be.

The "value add" the wholesalers offer is this:

Inventory. Just like you would rather go to one store to buy clothes than a few dozen manufacturers, so you would rather go one seller for homes. They know how to buy the home that consumers will occupy.
Renovation. Many of the homes they buy require sprucing up - some just paint and cleaning, some more extensive renovation.
Repackaging. This is a big one. The wholesaler buys for cash and will sell to someone who needs to borrow money. He "repackages" the home to better sell it.
Patience. When the wholesaler buys he has to move very quickly. He inspects in mere days and closes in as little as a week. When he sells his home to the end user, he adds patience - he will wait for the buyer to inspect, insure, probe, and finance.
Knowledge. Just like the store that only buys items for his shelves that he knows his customers want, so goes the real estate wholesaler. He buys the homes that are in demand, he has studied the market and knows what to buy, where the quality is and how to identify these homes. He also knows what his customers needs are regarding financing, closing, insurance, and warranties.

The reputable wholesalers use their knowledge of the market, and strong agencies like Market America Realty and Investments, Inc. to help them find their properties. They pay for this service by making sure the agencies get paid commissions or fees for their work. Smart buyers these days are offering their buyers fees to their agents to locate the best homes over and above commissions paid by the sellers.

Here are some techniques we use to locate homes for our investor buyers:

Statistical analysis. We divide our market into ZIP codes + four. In each plus four zone we review closings over the last three months. We do this on a trailing basis daily then compare this average price per square foot with daily new offerings that we get either on the MLS or from the banks lists we receive in that plus four zone. By 10 AM every morning this gives us the homes we need to look at personally. For example if the average sold price per square foot for that zone over the past three months is $60, and the new home on the market that day is $44 - we need to look closely at that offering.
Up Close and Personal. Once we have our prospective homes we need to figure out if the statistics are swayed by pools, age, or other factors not readily apparent. One of our agents familiar with that territory visits the home. Where ever possible we do an initial inspection for things like Chinese drywall, presence of appliances, and other salient factors like vandalism or mold.
Short Sales. We know the short sale process, do in-house loan modifications and deal directly with the banks to affect the sales and closing process. We make offers for our clients and work the bank, the property, and the seller during the long process. Our client's money is patient; the investor does not need quick answers. When we approach the bank with a short sale offer, we have compiled every document and the answer to every question the bank will have. In the package presented to the bank is a BPO, complete financial statements, a hardship letter, listing agreement and marketing history, and a solid cash offer with no contingencies along with proof of funds. We like the short sale part of the business very much, because often these are homes that have struggled for months to be sold. We can make the sale happen.
BFB. We prepare a one page summary of what the investor is looking to buy. What his exit strategy is, what locations he wants, perhaps what ages, size, or style of houses he is most interested in. This BFB (Basis for a Buy) document becomes our template in our search. But it is also a living document that can be changed as market conditions change. I can't tell you how many people call me up and tell me to just find them a "good deal"; " You know", they will say, "One I can make a lot of money on" This is not good enough for me or anyone on our team. We need to come to a meeting of the minds before a search is conducted and properties offered.
Kiss a lot of Frogs. Early in the process we may have to present many properties and indeed many offers to zero in on the targets. Often is it through "kissing a lot of Frogs' that we are able to make the most accurate BFB sheet.
Know the whole journey. You have heard it before and I will tell you again: You make your money when you buy not when you sell. Smart investors know their exit strategy and every step along the way to the exit. They know their costs of holding, of improving, of taxes, insurance, etc. They give us a margin they are targeting and we will ADVISE them of our opinion of the exit sales prices. Our customers set these parameters, we do not.
Network. One of my clients used the expression, "Target Rich Environment" to describe the real estate opportunities out there. What he meant is that there are many many properties to look at. In order to weed out the gems from the fools gold, we need to use all the tools at our disposal. I have mentioned some of them above. The most important tool in my arsenal, however, is the network of sellers, brokers, agents, and investors that my team and I have developed mutual trust and respect with over the years. For me its about relationships and enjoying the trust that has taken years to develop.

Ok, so you are just one person looking to buy one house at today's bargain prices.. What do you do? Number one; hook up with an experienced broker like us. (Call me and I will suggest one or two!)

Number two, sit down with your advisor and work on the BFB - build on your objectives and your exit strategy.

Then be prepared to compete with the big guys. Short inspection periods, strong offers, completed paperwork, and patience. Examine your worst case scenarios. If you can still sleep with the worst case - your probably are on the right track. Get a handle on and define your expectations and be sure to share those expectations with your advisors.

Making money is real estate was never easy - although it may at one time have seemed that way. Remember, people don't make money without adding value.

What's your value add?

"There is a Sucker Born Every Minute"; Ten new plowing fields.

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 02 Aug 2009 07:52:29 -0700

The quote "There is a sucker born every minute" is often attributed to that great showman P.T. Barnum; but the famous line was in fact uttered by one of his competitors. (Story here) Fact is; there is probably a suck born more often than every minute. We are all suckers at least once in our life.

The con man understands the human mind and our desire to believe. He understands it so well - he is able to capitalize our inherent gullibility.

Four years ago I was working on my Cyperlin project - an 80,000sf office building I was planning on the corner of Summerlin and Cypress Lake Drive. During our pre-sell period I received a call from a local real estate agent.

"Would you be interested in selling the entire project?" she asked.

Now keep in mind this was a $24 million dollar project and the success of Cyperlin depended in great part on my ability to pre-sell individual floors to end users so I could get financing. I had letters of intent for three of the floors, but as of yet no deposits or contracts.

"Indeed I would" was my simple reply.

Over the course of the next two weeks two conference calls were set up with her buyer. He wanted to move his oil trading company to Fort Myers, in fact he was thinking of buying Al Hoffman's waterfront mansion in Gulf Harbour (This is how the agent was first approached by the buyer). He wanted the entire building. He asked all the right questions. He was very interested in qualifying me and the project.

"Could I meet him at his Palm Beach house next week to discuss the deal?"

He would fly his private plane to pick me up. He called the day before the meeting and postponed it to the following week. Then he never called.

Never.

But I wanted to believe him. I kept giving him the benefit of the doubt; kept calling him long after it should have been obvious this was some kind of fraud.

Sucker.

Cyperlin, by the way, never did come out of the ground, the market turned before we reached our pre-sell goal and I never closed on the land. My gorgeous window walled, eight story building I still hope to build some day - but Northern Trust wound up buying the property and putting another cooker cutter Mediterranean style building on the corner. I get a wave of disappointment every time I drive by.

There is a sucker born every minute and just as there are suckers, there are the perpetrators of the fraud, the suckee to the suckor. The unscrupulous capitalize on the current market. where ever there is a frenzy in the market or a new trend on the horizon, you can bet there will be those that will capitalize on it.

Late night TV "infomercials" seem to be a good barometer, and lately, with TV advertising getting so cheap - we can see these ads on prime time.

Here, without qualification, are some of the areas that just MAY be ripe for the gullible.

Foreclosure Help
Chinese Drywall litigation or testing or repair
Short Sales Courses
Making Money in Foreclosures
Loan Modification consulting
REO sales courses
Buy bank lists (or foreclosure lists or pre-fore-closure lists)
How to profit in the down market books and classes
Improve your credit - NOW
Erase credit card debt

Ok, I know I probably missed some good ones, and some of the above areas have very legitimate providers and opportunities. But be careful, for when you want to believe something is true, it is very easy to be lulled into tuning fantasy into fact - with conviction.

If you need help with your pending foreclosure, you need advice negotiating with your bank, effecting a short sale, or an appraisal on your home; seek a reputable advisor - and a good place to start is by asking your friends an neighbors, or give me a call or drop me an email. Is there profit to make in this down market?

Of course.

Is it easy, quick and risk free?

Of course not.

As always, if it sounds too good to be true, it probably isn't.

But take heart, membership in the "I've been suckered" club is not very exclusive.

Chinese Drywall - Behind the Scenes

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 26 Jul 2009 09:04:47 -0700

Chinese Drywall - Behind the scenes

I was at a family gathering many years ago and my sister Julie's mother-in-law, Ruth, was trying to use a new instamatic camera and was being "advised" on how to use it by Julie's father-in-law Ed. Ed was an interesting guy, he retired as a professional photographer. Ed spent his entire career taking pictures for Sear's catalogues but could never seem to take a decent home photo with actual people in it. I'm certain he knew his way around sophisticated studio cameras and pictures of crock pots, but the instamatic camera might as well have been a microwave oven as Ruth tried to "point and click".

As the argument escalated between Ruth and Ed on how to utilize the simple features of this new camera, my father chimed in; "Let me help, I don't know what I am doing either."

"I don't know what I am doing either" might as well be the mantra lately for all the "experts" that are chiming in on the defective Chinese drywall issue. The problem with these well meaning "experts" is that they are applying knowledge gained from unrelated experiences to how to fix a problem that has yet to be totally quantified. We all love an easy solution. There isn't one.

The first solution was to fix the first symptom - failing air-conditioner coils. The coils were just replaced. This proved to be a costly solution to the symptom and did nothing for the problem. The coils went bad again. Other attempts were made ranging from repainting the houses inside to gassing the house as if for mold, de-humidifying the house, and finally replacing all the drywall.

The interesting thing is that in some of these homes each of these "fixes" worked. In many they did not. The final solution that many contractors were trying to avoid was gutting the home of all the drywall and starting from bare studs. I have indeed solicited bids from contractors for some houses I was thinking of buying. (Bids range from $10/sf to $20 to replace all drywall and re-install cabinets and fixtures- depending on the house and intricacies of the finishes)

Then the unthinkable happened. A house was gutted AND the copper replaced. The drywall free house was tested for the off-gassing and corrosive air that was turning copper black- and the "problem" still existed without any dry wall present!

Some experts say the problem can be fixed.

Other Experts say the problem can't be fixed.

They can't both be right.

I am reminded of a classic scene from the Broadway musical; Fiddler on the Roof:

Avram: (gestures at Perchik and Mordcha) He's right, and he's right? They can't both be right.

Tevye: You know... you are also right.

This contradiction is easier to understand and perhaps agree on if we could better understand what the "problem" is and what the "fix" is.

Some of the problems have been claimed are:

Sulfur like smell
Copper turning black
Copper Air-conditioning coils clogging and failing
Chromed fixtures pitting and/or turning green
Mirrors delaminating

Do these symptoms have contributing causes like

Humidity
Temperature
Air tightness of the home
Presence of copper
Type of paint

The ultimate fix would be when all the above symptoms no longer happens in the home. Ever again.

There are degrees of the problem. Some homes don't have the smell, but the copper is turning black. Some copper turns dark, not black. Some air-conditioning units have not failed, but the odor is present. Some homes have Chinese drywall (as evidenced by the label) but exhibit none of the symptoms. Some have no Chinese Drywall (Again - the label ) but have all the symptoms. Some homes have no visible copper in the home - all plastic pipe - so if we do not smell it and we see no black copper - do we have a problem?

Some easy fixes may work on homes with a minor problem but not on other homes.

I sell foreclosed homes for Chase and Washington Mutual. One of the homes they asked me to sell we later identified as having the symptoms of having defective Chinese drywall. (Odor and blackened ground wire in the electric switch boxes). They asked me to get a bid to "fix the problem". I got a bid to tear out all the drywall and replace it. Will this be a fix? I don't know. No one does.

What if the solution fixes it for a year and then comes back because the toxin was in the concrete floor and grew back? What then? Is this problem akin to taking out a cancerous tumor after the caner has spread systemically throughout the body?

Some houses just have SOME defective drywall and not in all rooms. Does the toxin then infiltrate the good drywall?

Those of you with experience in statistical sampling know that we cannot determine of all the drywall if infected with out destroying the entire home.. We have to take samples.. How many do we need to take? Some say a hole cut every 48 inches will suffice. Some say if the symptoms are present we have to assume all the drywall is bad.

Let's assume that with thorough testing we have determined that removing drywall from houses with metal studs, replacing all insulation and sealing the concrete permanently fixes the problem. If this homeowner was ever to sell the home again he would have to disclose that it once had defective drywall? Is this house worth the same as one that never had the problem?

Let's further assume that the testing and some hefty insurance premiums to an underwriter convinced an insurance carrier to guarantee that this home was toxin free. Is that the ultimate "fix"? ( I would say YES to this question)

I would compare the problem of disclosure and guarantee to a water intrusion problem that a homeowner has and then fixed. If, for example, the intrusion was caused by the grading around the foundation and the fix required digging around the entire house and putting in a drainage system and then the problem disappeared for five years and the home owner then sold the house - would he be required to disclose this fact to a potential buyer? What if the drainage tiles failed in the sixth year, one year after he sold the home?

Gary Aubuchon of Aubuchon homes has been a reputable builder in Lee County for years. He build excellent homes and has an excellent reputation. There was an article in the Fort Myers News Press today (Article Here) about one of the homes he built having the problem - apparently in a major way. The home owner is quite justified in demanding a fix from Aubuchon, but the builder is hesitant to do anything that would fall short of a total cure - and so far one has not been embraced enough for insurance companies to get behind.

The home owner is right, the builder is right.

They both can't be right.

That's right too!

By the way - we are watching this "fix" very closely (Click Here) Gross Point developers and BBL both have excellent reputations and have teamed up to tackle this issue.

Ten Tools Every Realtor Should Want

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 12 Jul 2009 08:09:33 -0700

Email system
Personal WebSite
Contact Management Software
Integrated and manageable phone system
MLS CRM integration
Calendar Planner
Mapping Software
Drip Campaigner
Training/mentoring
Lean Capture System
Robust Corporate Website
Forms Library
Transaction Tracker
Global exposure

Six months ago I started working with my team on a list of all the tools that it would be nice to offer an agent that joined our company. What is listed above is some of the results. Yes there are more than ten (thanks for counting) and the list above is not all - inclusive.

I am about to launch Market America Realty and Investment Group and I am recruiting professionals that like me know what it is to produce, want the tools to make production efficient, and want compensation to reflect their efforts.

If you are interested in learning more about how to accomplish this, please give me a call or drop me an email with your contact info.

Gregg 239-851-5464 or GFous@marketamericarealty.com

Now its THINGS that are dependable, and People that Need Some Work

Gregg Fous (Market America Realty and Investments, Inc.) — Sun, 12 Jul 2009 08:07:35 -0700

Now its THINGS that are dependable, and People that Need Some Work

Am I kidding myself or are things more reliable than people these days?

When I grew up in New Jersey we had a pretty cool basement that was divided into three general areas; the bar/tv room, the summer kitchen/laundry room, and the work/storage room. Back in the work/storage room was the furnace and hot water heater, the fireplace cleanout chute for ashes, and most importantly, my father's work bench. It was a high counter made out of an old wooden teller counter probably discarded by the bank my father worked for years ago. The top of the counter was strewn with all sorts of things and stuff. Door knob parts, fishing reel spokes, hinges, axe heads or tool handles; these I classified as THINGS. Then there were pieces or metal and wood, and cut bolts and unrecognizable parts that at one time belonged to forgotten THINGS. These I classified as STUFF.

Of course there were also TOOLS. The obligatory vise, an electric bench grinder (I loved sharpening things just to see the parks fly) and wrenches hanging on the wall behind the bench.

It was important to Dad that we never threw out any of his stuff and certainly none of his things. Generally the tool bench looked a mess. There were coffee cans full of various bolts, mason jars with nails, brads, and screws that might be needed for some future projects, and paint brushes in various stages of use - from stiff "oops I never cleaned that one" to brished still in the paper package (no not plastic - that was yet to come)

Once in a while Dad would go down there with no specific project in mind. He just sorted nail sizes, organized his tools and things and threw out some "stuff". He would get ambitious and organize his wrenches by size, put all screw drivers in one drawer and pliers in another. Normally part of the way through this task he would start fixing some old thing and the workbench never got totally organized.

The bench itself was at the back of the basement, on the narrow side, past the furnace and

the stairwell, There were no wall light switches. To get to the bench you sort of walked in the dark swinging your arm back and forth feeling for the pull sting from a bare light bulb hanging from the rafter. This was Dad's world and little kids were not encouraged to explore this sanctum by themselves. If he asked me to go get him a hammer or some other needed instrument of construction, I would go down there and sort of hold my breath unit the light would prove to me that it was unoccupied and safe. But Dad put an old bar stool there for me to sit on when he putzed.

In my mind a house needs a work bench just as house needs a kitchen. A house without a workbench was rather strange to me; Except for Paul Nelsons house. His dad was the local pediatrician. No work bench: he had a tool box. I remember it pretty well, it was red and it even had a padlock. One time Paul and I spied it with out the lock. It was full of seemingly new tools. A shiny hammer, matching screwdrivers, a pencil; obviously Doc Nelson could afford to buy new things. He didn't need to fix stuff and turn it into things.

The only tool box my father had was a wooden one he made to carry tools to the point of a project somewhere other than the work bench. It was a long narrow affair with an old yellow broomstick as a handle. It was more commonly used to bring tools BACK to the workbench. Tools that he needed for a project he had one of us kids run down to get one at a time, carefully walking in the dark side of the basement cautiously swinging our arms to turn on the light.

Here in Florida we have no basements and our workbenches, if we have them, are relegated to a tiny corner of the garage. But things don't break as much these days as they did when we were kids, and if they do break, we certainly can't fix them at our workbench. In fact, we hardly fix things at all.

When I was in my early 20's I bought an old Buick with a V-6 engine. I remember my father in law coming out to listen to the engine making banging noises like she was ready to explode.

"Your pushrods are shot and you probably need to have new rings"

With in two days we had the entire engine apart, sent the block out to be re-bored, and I bought all new "things" for that engine. (Rods, or lifters, and valves, - I can't remember anymore). The point is, we never had to buy a tool. They were all there somewhere on his workbench. The other point is, the engine could be worked on. I could SEE the alternator, the carburetor, the fuel filter, and the radiator hoses. If I buy a new car today, I don't even know why I bother to look under the hood before I buy it: Perhaps some ingrained manly thing we think we are supposed to do. I barely recognize an engine much less a carburetor; and fix anything? Forget it.

I also remember in my twenties the push for zero defects in manufacturing. I knew a little about this as I was a manufacturer's rep selling raw materials. One of my neighbors actually made a living as a quality control consultant. He had an entire company that taught other companies how to make stuff that didn't break down. I think his company and those like it helped hasten the demise of the fixit workbench.

There was another major engineering field that also was designed to prevent tinkerers from fixin' stuff. I don't know what it was called, but it had something to do with making the outside case that held the thing into an integral part of the thing. The plastic case around the can opener, for example, all of a sudden was not to just keep it clean and neat looking, but it was in fact part of the can opener. Once you took it apart it was impossible to put back together again. In cars they called it uni-body construction. In can openers, it's well, cheaper to build it that way. So cheap, in fact, we just toss the old one when it gets too dirty and buy a new one.

Keep in mind this didn't stop Mr. Fixit's from TRYIN to fix something, it just meant that we took the whole thing apart before we threw it out and bought a new one.

Things we buy today are pretty reliable, very reliable in fact. Cars don't break down, electronics are solid state (pretty cool all-encompassing term, isn't it? SOLD STATE - kind'a tells you right there it's gonna last forever).

Things that wear out are disposable, and things that need adjusting are easy to adjust, and things that we need for along time, last a long time.

In short I think we have this engineering, production and quality control thing down pat. The problem today, is people.

Most people forget that they have to have to add value to what they do or risk becoming obsolete. I'm not sure how this trend has come about, but I will tell you this: in the current economy folks are learning pretty quickly that unless they can add value to a proposition that will be become redundant and not needed.

I talked a little about this last week. We have to produce ourselves out of the economic mess we find ourselves in. If we do not produce, we are not needed.

I see examples of "no production" people all around me:

I'm trying to sell a bank building to client of mine. I call the agent listing a building so I can tour it. I don't get a call back for FIVE days.
A member of a government board sets up a meeting for a land deal and wants a piece of the deal for being at the meeting - not for a contribution, but for his presence.
A Realtor sends me a client name and address and wants a 20% referral fee - but doesn't contribute anything input to the deal or the relationship - not even a personal introduction (because he doesn't know the potential client). BTW - I do not take these kinds of referrals.
Agents that LIST a property but don't actively try to sell it.
I am told by an acquaintance, "I lost my job" But when I ask what they did for the organization, they are hard pressed to explain their function to me or how they contributed to the bottom line.

In the boom boom times employees could get by with good effort and no results. I relate the story often about the sales person who makes the calls every week, satisfied that he puts in the effort - he does not get the sale mind you, but has put in the effort - and then is surprised when he loses his job for lack of production.

Farmers understand pay for production; managers and support people often do not. Your lawn maintenance guy understands pay for production, the salaried sales clerk often does not. You would think that the commissioned sales people understand production, but many do not.

Want some good news? The current economic climate is going to groom a very reliable crop of producers - because those that can't or won't produce will fall away to the producers. The market itself will create it's own version of "zero defect" producers, because these will be the ones that survive.

There is no work bench for fixing unreliable people. This corrective work is done in the field.

For me, I still want a house with a work bench, when I'm not producing; I need a place to putz.

Where's My Money - A Lesson....

Gregg Fous (Market America Realty and Investments, Inc.) — Mon, 06 Jul 2009 16:53:54 -0700

Hey! Where's my Money?

Every morning about four minutes before the class bell rang signaling the start of class, young Anthony would quietly place a bright red apple on the edge of Miss Topp's desk. He has been doing that with a shy smile ever since the first day of school in Early September. On that first fall day of school Miss Topp was pleased but not that surprised. Many first day children brought her a little gift on first day. The second day, Anthony was the only child that brought her a gift - another red apple. This continued day after day until Miss Topp began to look forward to little Anthony walking past her desk, eyes staring down at his shoes and quietly setting down the fruit, always on the same spot. In fact Miss Topp's desk always looked the same. Blotter in the center, a ceramic cup to the left jammed with large black pencils, a pencil sharpener attached to the front left corner for students to use, and of course Anthony's apple on the front right corner. That is until after the afternoon break when the apple would disappear. Miss Topp got into the habit of eating the apple during the daily break when the children were at recess. This apple treat became Miss Topp's daily routine. She no longer brought a snack from home. She didn't have to. Anthony's apple was as reliable as that afternoon break. It always happened.

Anthony bringing an apple was as routine to Miss Topp as Hank always being the last kid in the class to quiet down, or Maria Arnaboldi always getting the top score in any test, or Stephen raising his hand first for any question she threw at the class. She grew to expect it, she habitualized it and it became her norm.

One windy March morning as Miss Tipp sat at her desk a few minutes before the bell, she looked up at saw Anthony sitting at his desk. Something was wrong. She wasn't quite sure what. The she looked around - and no apple!

"Hey, what's going on here?" she thought, "Where's my apple?" Miss Topp asked Anthony.

"I didn't bring one," was Anthony's only reply.

"But I count on that apple every day. You have been bringing me an apple in for months now. I will have no snack today, will I?

"I know Miss Topp.

I know you were expecting perhaps a joke or at least a well defined lesson in real estate. But the moral of the story is you can't count on external events that you do not control and do not participate in and do not even understand. It is human nature to behave like Miss Topp. It's not bad, or unethical. It's natural.

I was watching a special on Bernie Madhoff last night. All these people were getting these great returns on money that they entrusted to Madhoff. They didn't ask any questions as to why, or how, or how long. But when it stopped coming they screamed: "Where's my money?

I know we are told that Bernie was a crook and he lied and misrepresented the facts and he certainly wasn't a little Anthony. But most of the investors getting 20% returns were not asking a lot questions, were they?

The real estate market was booming years ago and prices were rocketing to the stratosphere and most of us were happy with this. When it stopped we asked "What happened to our money?" We forgot to ask, "Why is it skyrocketing, how long will it skyrocket, and what can I do about it?"

The money we access with our credit cards is so easy to use. I pull up to the gas station, run my card through the machine, and pump and go. But what if all of a sudden the card is not accepted because the bank backing it has no cash and shuts down my credit? I'm gonna say "Hey! Where's my money?"

I had a very large unsecured credit line with the bank. Two years ago I called to make sure it was still there. It was. Two weeks later I wrote a check on the line to cover payroll. It bounced. "Hey! Where's my money?"

In today's economic environment we can take nothing for granted. For example, I have been selling a least one house every week lately and I am gaining more and more clients looking for bargain houses to buy. Many of these new clients are late. I got a call from a good friend yesterday. He said, "Gregg, my cousin wants to buy a home in South Fort Myers, three bedroom, two bath, with a pool for under $250,000. I read in the paper where house prices are at a new median low of under $100,000 ($88,000 actually)"

I let Andy know that homes like this where he wanted to buy are around $400,000 now. "Hey - he said what happened?" I told him about Sallie looking for a house in SW Cape for under $75,000. The lowest one I found this week was $79,000.. "Hey what happened?"

While many folks are sitting on the side line houses are selling. They are selling at a rate that is more rapid than in any time in Lee County's history. Yes prices are lower, but they are without a doubt on the upswing. Not everywhere, not every house, not every price point. The median price is down because cheaper houses are selling now, more expensive, larger houses are not - so the median price is down.

The messages I am trying to get to my clients are these:

•1. This is no long term norm.

•2. Dig deep into the trends; ask how, how long, and why.

•3. Yesterday is well, yesterday's news. Figure out where we are gong tomorrow.

•4. You and you alone are responsible for your own success.

•5. Find out where the apple is coming from.

By the way, Anthony got five years after being convicted for apple laundering. Miss Topp now brings her own afternoon snack.

What I look for in an Investment Home

Gregg Fous (Market America Realty and Investments, Inc.) — Mon, 06 Jul 2009 16:51:36 -0700

When I am looking at investment opportunities in fixer upper homes I look at the following:

Good Bones. The house has to have a solid base, something to work with; I call it good bones, as in: " This house is old, but it has good bones." The home has a good layout and was built with quality.
Fixable Problems. I love fixable problems like a bad smell or broken windows or no air-conditioning. I can fix those things. I can't fix a bad location or a small lot.
Location. You might think this is easy, but sometimes it is not as obvious as just a good neighborhood. It should be close to schools, transportation and medical services. Look into transportation and shopping, city services and infrastructure and roads.
Height of the tie beams. Some older homes have low ceilings and in particular low tie beams. I look for homes that if they do not have the high ceilings, at least have tie beams that are high enough for me to raise the roof and put in taller sliders.
Support. The neighborhood must support my plans for renovation, not just price, but appearance. I want to make sure I conform to the area.
Everyman's house. I am not out to make a design or fashion statement. I want a house that will appeal to the broadest market. I have heard time and time again about a house that does not sell, "But there is a special someone that will appreciate the uniqueness of this home". Let them say that about someone else's home, not one that I am tying to fix up and sell or rent.
My Sweet Spot. I like to go with what I know, where I know it.. A home might be a fantastic deal, but if I am not personally familiar with the area and it is not close to what I call my "sweet spot", I will not buy it.
Know how to get out before you get in. You have heard it many times: You make money when you buy, not when you sell. It is true that you decide what you are going to pay, someone else decides what they will pay you. Don't wait until you own the property before you figure how you are going to make money on it. Figure that out FIRST.

There are enough homes on the market to day that you should not have to compromise on any of your criteria. Wait until you find the opportunity that meets them all. If you need help setting up your criteria and your objectives, call me, I would be happy to sit down with you and help you. Gregg 800-439-1580 extension 52 GFOUS@MARKETAMERICAREALTY.COM

Ten Things I say often and hardly anyone listens to:

Gregg Fous (Market America Realty and Investments, Inc.) — Mon, 06 Jul 2009 16:49:54 -0700

Focus On the task at hand, the ball, the next step. Narrow your territory, your efforts, your to do list.
It's only called work if you would rather be doing something else. If you spend too much time working, change what you do.
Answer the question you want to answer, not the one that is asked. Don't let others drive your discussion, stay on track and make your presentation.
It's about the relationship. It's not about price or product its about the relationship.
If you see it, get it now, from where you are. Don't wait for a better position, time or place.
You can't skip the basics. There are short cuts to the goal but he fall is just as short. Refine your basics and they will become a second nature to you. habitualize them
Write a list. Let your ideas gel on paper. Work your list every day.
Most people die in bed. Get out of bed. It's a very unsafe place. No great philosophy here, you gotta get outta bed to make things happen.
Don't hate. Just refuse to like. Hate takes energy away from good things. Indifference takes no effort.
What a great country! Bailouts, taxes, etc., It is still the best place in the world.

What do you think of me?

Gregg Fous (Market America Realty and Investments, Inc.) — Mon, 06 Jul 2009 16:48:15 -0700

This morning while I was reading the morning paper I had the TV on. The Fountainhead, by Ayn Rand was playing on Turner Classic Movies. The antagonist to Howard Rourk, Ellsworth Touhy, meets Rourk by chance at a construction site. For most of the book Touhy has been out to destroy Rourk, the protagonist of the novel and the representation of Rand's philosophy. Touhy is anxious to hear what Rourk has to say:

"So tell me Rourk. Tell me what you think of me." Asks Touhy.
"But I don't think of you." Rourk offers as he walks away.

Whenever I hear one of my kids or friends say: "I hate such and such, I always respond with, "Don't hate, just refuse to like, it takes much less energy."
I had never made the connection with my sentiment to Ayn Rand until this morning.

Not sure what this has to do with Real estate, but I needed to get it out my brain and onto paper so the rest of this stuff can come out. Enjoy.

How to Buy an REO

Gregg Fous (Market America Realty and Investments, Inc.) — Mon, 06 Jul 2009 16:46:10 -0700

How to Buy an REO

The topic is not how to find an REO to buy, nor is it how to determine what REO to buy. If you need help with these topics call me and let's sit down. What I want to talk about is how to buy the one you have identified.

Buying REO's is not like buying a home from an individual. You are buying from an institution. There are no grey colors; only back and white. It also is not a race. First does not count. Highest and best counts.

Let's talk about highest first. You need to be working with an experienced and thorough agent that can make you just as knowledgeable as the asset manager for the bank that is handling the decisions. The asset manager had at least two real estate agents prepare a BPO (Broker Price Opinion) for the subject property. You need to do the same. Do not hesitate to pay for these BPO's . You should be able to get them for $50 to $100 each. If you are a loyal client and willing to sign a buyers rep agreement with your agent, I am sure they will do one for you free of charge.

Let me take a moment and talk about buyer rep agreements. You might be hesitant to sign one; and you should be. I can understand how you feel, and I felt the same way when before I was an agent and I was using agents to do work for me as a buyer. But then over time I realized that good agents work hard and diligently and have many demands on their time. But I need his full attention and I need to let the agent know that his efforts will ultimately be rewarded.

Do not hesitate to sign a buyers rep agreement - ESPECIALLY when dealing with REO purchases or looking for bargains in a very competitive market like today's.

Back to the BPO. The BPO will give you a good idea what the home is worth and what the bank will accept. Just like in any negotiation it is helpful to know the other sides' motivation. The bank's motivation is simple - Highest price quickly. They want simplicity and no contingences. They want to move onto the next property. Which is where we come to BEST:

Once you see the BPO for the property you want, ask for all associated documentation. A good REO agent will have things like condo docs, tax records, sales history of the property, and perhaps old surveys or inspections. Go talk to neighbors. Visit the area a few different times of the day. Go on the weekend. Get to know more about this property than anyone else. Look at the short sales in the area.

Whenever possible make your inspection prior to the offer. Do not make the offer contingent on ANYTHING. Your competition may be a higher priced offer but may come with a seven day right to inspect. You may win the bid at a lower price if you have already done your inspection.

Many years ago I bought a house in Cincinnati from a bank. I looked at the property and decided what it was worth. I then found out that there were three bids higher than mine. I wound up not making the bid. Ninety days later, almost to the day, my agent came back to me and told me the bank called her and asked if I was still interested. It seems that all three of the other contacts fell though during the due diligence period. I told her I was interested but I needed to go through the house one more time. I took a clip board and assumed everything that might need to be fixed HAD to be fixed. I wrote all these cost estimates down. I submitted my bid based on cost estimates for it all, but with NO contingencies for inspection or financing.   The bank called me directly a few days later and said they would like to save some time and counter my offer over the phone. I replied that I could save them a whole lot of time as they already had my final bid in their hands.

I got the deal.   (By the way the only thing I did not have to replace that I thought I would have to, was the slate roof. It cost only $135.00 to repair.)

Ask your agent if there are any addendums that the bank needs signed and you can get ahead of time.   Normally banks ask for proof of funds or your ability to borrow. Even iof they do not ask, give them that information and make it easy for them to verify balances by including your banker's phone number and name and email address.

Ok, you have your nice tight package that is now in the hands of the bank. Don't stop there. Follow up. Talk to the banker's agent. Are their other offers? What are they? How many? The seller's agent has a job to do - and that is to get the highest and best offer that he can get for his client. If it is in the banks best interest to tell you that you are two thousand below the next offer, he may tell you that - hoping to get you up a few thousand. Many banks set a deadline for offers; after the deadline they come back again and ask for "highest and best" again. You may be able to pre-empt that process by having such a solid first offer that they take the path of least effort and accept your offer.

Do not be discouraged. The process is not as much art as it is science; but there are still personalities involved. Good agents know how to get to the personalities and make the deals happen, but excellent agents go beyond that and make certain that there are no other reasons for the contract to be thrown out by the bank. They will help you make a tight offer that is highest AND best. Good luck and good buying.

I would be happy to sit down with you and help you. Gregg 800-439-1580 extension 52 GFOUS@MARKETAMERICAREALTY.COM