Ok, so I’m sitting here at an open house anxious for that first person to walk through the door. I had a caterer (Chartreuse Catering) make some goodies. It’s an hour in and I’m getting a tummy ache from eating the yummies. It’s going to be a long next 3 hours.

The last open house I had, the first couple that came through the door made an offer on the house for their son who was in Iraq at the time. It’s weird because the last time that I have had this much time to myself with this much quiet was at an open house.

What are your experiences with open houses? Help a green pea out.

Now off to the dessert tray. Just call me Fatty McButterpants.

A friend of mine is also a friend of this client. Knowing the type of person The Tellis is, he talked his friend into meeting with me just to see a different kind of REALTOR®. I met with the two of them at a local restaurant. We ended up talking for about seven hours. Out of those seven hours we talked real estate 30 minuets, maybe an hour. The fact is we are all Air Force veterans and had connected on an entirely different level. On top of that we had all left working for the largest defense contractor to pursue our entrepreneurial ventures. Needless to say our personalities are much alike.

Two days after that we met again to go over the listing agreement. One of the hang-ups that he had with the last agent was being “stuck in a contract” with an absentee agent. I understand wholeheartedly because I had the same hang-up when I was a buyer. So I told him that he can cancel the contract at anytime with no penalties or hard feelings. You see, If I get a listing and find out later that there is not a good client to The Tellis relationship, I give the client an out. I don’t want to keep someone on the hook that doesn’t want to work with me. I do however keep the holdover period. After I told him that he could cancel at anytime he said that he had heard that before and if I meant it to put it in writing. So I put it in writing. This was the first time someone had ever asked me to put it in writing. When I did put the fact that he can cancel the contract in writing he said he asked other real estate agents to do that and they pretty much told him to go fly a kite. He ended by saying “Tellis, you are a man of your word.”

The Tellis is a man of his word. I don’t promise anything that I can’t deliver.

Is it a buyer’s market? You betcha. Are there some good deals to be had in buying a house in this current market? Absolutely. If I am serious about purchasing a home should I put in an offer of a most absurd amount and hope the seller is so desperate that he will accept it?

Now the answer to that question would seem like common sense. However, that fact that I am posting about this tells you otherwise. Don't get me wrong. I am no enemy of a good bluff. That is part of the game. But fair is fair in any market and there is a thin line between negotiating and down right criminal. There is away to take advantage of this market as a buyer without trying to take advantage of the seller.  A buyer’s market doesn’t mean sellers must settle for getting ripped off.

Also keep in mind that the negotiation process of real estate goes for beyond the purchase price. You have closing cost, closing date, and items found in the inspection that need to be repaired to name a few. If you do happen to find a seller so desperate and in such a bad way as to accept a lowball offer don't expect any room to negotiate anything else. 

I visit a small town in Il. once sometimes twice a year. All of my wife's family live there and they all ask me about real estate. They don't quite understand how real estate boards and mls systems work. When they ask me about a property in there town that they are interested in I try to help them as much as possible. In short my question is how many of you are licensed in multiple states?

There are different ways to do a quick analysis of investment properties. When in the initial search process you can use the GRM (Gross Rent Multiplier) method to start narrowing down properties. The GRM is a rough value. Do not rely on this to make your offer. Here is the process:

If you know the GRM, multiply in by the annual gross rent of the property you are evaluating and this will give you a rough estimate of value. So if you know the annual gross rent of a property is 35,000 and the GRM is 10, $35,000 x 10 = $350,000

Value = Annual Gross Rents X Gross Rent Multiplier

But what if you don't know the GRM? This is when working with a REALTOR is very beneficial. Have a REALTOR get you a report on listings similar to the properties you are interested in. Once you have those take the selling price and divide it by the annual gross rental income. So if a property has a selling price of $350,000 and an annual gross rental income of $35,000, the GRM is 10.

GRM = Sales Price / Annual Gross Rents

Sellers generally try to sell their properties at the highest possible GRM for that market. Buyers typically try to purchase investment properties at the lowest possible GRM for that market. The beauty of this initial process is you don't have to visit the property to get this rough value. The numbers have to make sense. When the numbers make sense then it's time to found out the real income figures. To get the real income figures you must find out the prior years rental income which takes into account uncollected rents and vacancies. Subtract all operating expense including taxes to get the properties real income.

 TAFN