A FORMULA FOR DISASTER IN A FRAGILE MARKET PLACE:

OVER PRICING HOMES = HIGH INVENTORY + LESS SALES + DESPERATE SELLERS = CONTINUED HOUSING CRISIS: A FORMULA FOR DISASTER IN A FRAGILE MARKET PLACE!!!  

We MUST do in-depth research before we price properties!!! ....and we MUST price properties as if our lives depend on it.(...because they do!) If we don't face over-pricing head on, we will see the inventory levels climb like never before! Not only that, the desperation seen and felt by huge numbers of sellers that we witnessed during the downturn in 2008 will likely re-appear! In many markets there are still great numbers of desperate sellers.

    OVER-PRICED HOMES = HIGH INVENTORY +  MORE DAYS ON MARKET + LESS SALES + DESPERATE SELLERS = CONTINUED HOUSING CRISIS.

In my last blog post, I mention the above formula to the umpteenth agent who said he would take an over-priced listing but would schedule a reduction in the agreement in 30 days or 60 days. There are still huge numbers of real estate professionals who do not understand the importance of correct pricing---and we direct the whole real estate market; or at least we are supposed to!

In my last blog post "HOW DO YOU HANDLE A SELLER WHO WANTS YOU TO OVER-PRICE THEIR HOME ?..." I was amazed at how many agents feel it is ok to over-price a listing "for a short time like 30 days" ...let me remind you all that the best time to sell a listing is in the first 2-3 weeks on the market! Over-price it and you miss the best selling time!!!

Even a small amount over the correct price of a home will keep it on the market for too long! We can not afford this in this housing climate; people are desperate now (and more will get there)....but there are buyers out there and they are looking for bargains, even here, where the average income usually very high.

As a community of professionals who are looked to, by most homeowners, for our guidance and expertise, we MUST not over price homes. We need to take a stand NOW before we slip again into the abyss.

This may seem evangelistic to a lot of you but it is the basic truth: If we all take one listing with even a small of amount of over-market pricing, look at the impact! Guess who is in charge here?...We are and we MUST do what we can do to bring the housing market back to some normalcy.

 PLEASE TRY TO UNDERSTAND THE URGENCY AND IMPORTANCE OF THIS! DO NOT OVERPRICE HOMES IN THIS MARKET OR WE WILL NEVER GET OUT OF THE CRISIS!!!

Paula I. Hathaway, LBA, Prudential Douglas Elliman

Top Producer, Diamond , Gold and Chairman's Circle Awards

Has Housing Reached A Turning Point Or A Point Of No Return?

While the pundits and politicians discuss the housing crisis and the various ways to effect a recovery, the question to consider is: Has housing reached a turning point or a point of no return? It appears that housing is unlikely to return to its most recent glory days. But that’s not necessarily a negative interpretation; it just means that the housing market of the future will look dramatically different from that of the past decade.

 

We now know that the housing boom of 2004 – 2006 was temporary and artificial. It wasn’t an indication of forever escalating prices; though many seemed to believe so. The boom market was a bubble of inflated prices and irrational expectations of outlandish profits. Just as the stock market bubble that preceded the Great Depression created investors of doormen, maids, construction laborers, bartenders, and others seeking to capitalize on skyrocketing stock prices; the housing bubble created a wild frenzy of speculation and inflated home prices that was impossible to sustain.

 

Homeowners who purchased anticipating great profit, as well as investors, flippers, real estate agents, mortgage brokers, and those who bought early enough to borrow against their profits, have seen their dreams of easy cash and growing equities vanish. More than two million of those homes have fallen to foreclosure, and millions more are doomed to follow.

 

Hindsight is great, and shows the error of such paths. We should have known better, but we didn’t want to miss what appeared the opportunity of a lifetime. Homes, however, are not a commodity to be traded like soybeans, pork bellies, or precious metals. Homes are just that, a place to live, raise a family, create memories, and find solace at the end of day.

 

So, has housing reached a turning point or a point of no return? Perhaps it’s done both. Perhaps we’ve learned a valuable lesson—some of our most important ones come at a great price—and though the cost for many has been unbearable, the lessons remain. The bursting of the housing bubble may ultimately restore order to both housing and the financial markets; and the artificial market is doubtful to return until some future time when its memory has been erased.

                                                                                                                                                       

With that in mind, should anyone buy a home today? Of course, those who need one. However, some of those motivated solely by profit may find disappointment. Will home prices increase? Without question. But there is a question of time, and how  much will be required before prices increase. History tells us that the prices of those homes bought with careful consideration of both location and value will increase at a rate above the rate of inflation. If we do better, that’s great. If we don’t, we mustn’t lament, for we bought a home; and that can be worth far more than money in the end.

 

The Housing Guru: The one source for all your housing questins

10 for Oh-10: New Year's Resolutions That Will Blow Your Crabby Competition Away

We will remember 2009 as the year everyone was CRABBY and CUSTOMER SERVICE sucked. This was the year that  businesses behaved badly.

But here's the good news: In 2010, this has left the window of opportunity WIDE OPEN for anyone who wants to steal business from competitors. Here's why:

In the so called "new economy" of 2009, business strategy revolved around this miserable mindset:

1. Let's fire everyone we can, cut the pay of those left (they're lucky to have a job, after all), then try to operate normally with one third of the staff.
2. Let customers figure it out. Send them to our website.
3. Let customers wait on hold forever or go straight to voice mail jail. 
4. Let customers wait in line.
5. Let customers stand at the front desk and ring a bell if they expect service. We fired our receptionist months ago.
6. Heaven forbid we should pay anybody to talk to anybody! If they need support they can e-mail us.
7. Why should we be friendly or nice? We're in a recession after all.
8. Let's make our product worse to save money. Half the size, half the warranty, half the quality. No one will notice. If they do it will be too late.
9. Let's cut our hours, close locations, and turn down the heat.
10. If we absolutely need to hire someone, let's hire a part time employee, pay no health insurance, no benefits, and give them no training

Is it all okay because "everyone is a little on edge these days"?

 Last night after work I stopped at the store with my New Year's Eve grocery list:

1. Cracked Crab
2. Sourdough Bread
3. Caesar Salad
4. French Onion Soup
   
5. Champagne (of course)
6. Chocolate (the more decadent, the better)

The seafood counter was mobbed, but that was okay by me. Other people in line where like me: happy. Jovial, even. (Long weekend ahead starting off with a party).

But behind the counter, it was a different story. Grumpiness and bad humor prevailed.  The seafood clerks were overwhelmed, and needed at least 3 more people to help them.

They had been on their feet for hours, and were working in smelly seafood smeared aprons. In the middle of winter, they were doing a job that required they plunge their hands in ice every few minutes.

It should have bothered me, but I have become so used to bad customer service that I wasn't even fazed.

Get the point? Getting good service would have been more surprising and unexpected.

For 2010 there will be a once in a lifetime opportunity to steal business from your competitors.  Here's why:  The level of service out there has never been worse. 

You will need to be willing to do these basic (but long forgotten) things and you will land all the business you want from customers who are (by now) used to being treated badly. 

Simply make these resolutions:

1. I will grant customers the ability to talk to ME (not to my voicemail and not to my e-mail)
2. I will call them before they call me.
3. I will have live, face to face meetings with my customers whenever I can (what a concept!)
4. I will remember that a crabby customer needs my sympathy more than anything else.
5. I will go out of my way to show I genuinely care by asking directly what the customer wants and needs.
6. More than anything, I will cause my customers to believe they matter, and they are important. 
7. I will never allow my customers to know I am feeling crabby, overworked, or underpaid.
8. I would rather have fewer customers that are lavished with attention than many customers who get no service, or poor service.
9. In a world where service is getting worse, mine will get better.
10. I will know my stuff.

HAPPY NEW YEAR, READERS and SUBSCRIBERS!

Written by Janet Guilbault, Mortgage Banker and Direct Lender Based Out of the San Francisco Bay Area

Beware the photos you use!

I’ve seen different articles and posts about photos rights, and people using photos from a previous listing or another agent. Some people think their MLS has rights to any photos in their system, so they think it’s okay. But just because someone previously uploaded them to the MLS doesn’t mean they have rights to the photos.

Here’s an interesting article about a photographer who went after an agent for using a photo of his without permission - and was awarded $1,000 for a single image. But read the article closely, it references another case from last year where a photographer was awarded $12 million from a real estate company who used multiple images without permission.

http://photo.net/business-photography-forum/00UD3R

The moral of the story: Unless you took the photos yourself, find who has rights to them before you use them at all. Even if you hired a professional photographer, odds are you only have limited usage rights. You typically don’t own those photos outright.

 

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Create your own high-end virtual tours, using your own photos.

CPG Tours

6 Reasons why your house won't sell.

1. Your photos are unimpressive. The vast majority of home buyers start their search for a home on the Internet, your house had better look great in print. Not just nice... downright fabulous.  Today we are considering internet views as a 'virtual showing'... if your house gets past that, then they might (just might) make an appointment to see it in person... We consider that your SECOND showing. Today's buyers are expecting good quality photos (and lots of them... just 1 shot from the street won't cut it!), a virtual tour, maybe even a floor plan, if applicable.

2. It's overpriced. You've got to view your own property as objectively as possible.  Look at the home like a "buyer"... if necessary, go out with your Realtor and view other homes that are priced comparably to yours.  Be objective.  Given the other options on the market (and yes, you DO have to include short sales and foreclosures on your list... your potential buyers are!), would YOU buy your home, over the others on the market?

If no, then you either have to "update" your home to meet or beat the competition... or lower your price to adjust for it.  if you can't afford to sell for the price, that you KNOW it sell for, you may want to consider just removing it from the market.

3. It shows poorly. This could mean almost anything... from the barky, barky dog, to the smell of the diaper pail.  Maybe the carpeting is a bit worn, or the woodwork shows a lot of wear.  All things that don't show up on the internet, but whoa.... once you get inside the house... they show up, like a cat-urine-smell on a 95 degree day in New Orleans!

4. You're invisible. Today's buyer comes from the internet, almost exclusively.  Have you (or your agent) simply plopped the property on the MLS, and started praying?  Are you on all the websites...(Trulia, Zillow, Craig's List, Google Base, etc...) all the places that buyers are searching?  If not, you want to be.

5. Your listing is tired and stale on the market. Okay... yes, you overpriced your home initially when you first came on the market 2 years ago.  But since then you have reduced your price almost monthly... constantly chasing the market down.... Now, finally you're truly priced where you should be... but your listing is tired and stale.  Everyone looking for your type of property (ie: 3br/1.1 bath) in your area has already seen it, sometimes twice... and they remember that there was "something" about it that they didn't like... but what they don't remember is... what they didn't like.... was the price.   Time to take the listing off market.  Let it cool off (3-6 months), and bring it back on fresh in the Spring.  Yeah, you'll have 6 mos. worth of holding-costs... but you'll more than make up for it in your purchase price.

btw... Avoid the temptation to bring the house back on at a higher price, than when you left the market.  Just "don't do it"!

6. Your house won't appraise. The house looks great... you've finally gotten someone to bring you a bid on your slightly over-priced, but beautiful pied-a-terre.  But the bank appraiser says it's worth $20,000 less than what they've agreed to pay.  Heavy sigh... bite the bullet.... negotiate with them.   If you have to drop the price $20,000 to make it work.... "make it work"... chances are, anybody else trying to buy your house will run into the same problem.

5 Reasons for Firing A Client

In challenging markets...like the one we currently face...it's difficult to find new clients.

Why would you even consider firing a client?

Purely and simply, even the best client relationships can turn bad...and when they do, it's time to end them by firing the client.

Most of us are too busy to allow deteriorating client relationships to drain time and energy from attracting new clients and serving existing clients. With that in mind, here are 5 reasons for firing a client.

1. Perfection Obsession

These are the buyers who are obsessed with finding a perfect home, in a perfect location and at a perfect purchase price.

Or they are sellers who insist on selling their homes terms and conditions that they consider perfect.

Perfection rarely exists in our world, and besides, your responsibility is to give clients the best possible service, helping them find the best possible deal...not the perfect one.

2. Lack of Trust

This can cut both ways.

For whatever reason, you no longer trust your client or vice versa.

Since trust is a key element of all client relationships, once the trust is gone for either party, the relationship is essentially over.

3. Miscommunication

Sometimes miscommunication is inadvertent or accidental.

Others times it is deliberate.

In either case, when miscommunication becomes a common element it represents a problem to be addressed.

If the problem of miscommunication itself cannot be resolved, it's time to end the relationship.

4. Conflicting Advice

We all have advisors who offer opinions and suggestions on our decisions.

Some of these people are professionally trained, qualified and well informed. Others are well intentioned but otherwise poorly informed and mis-directed friends relatives and acquaintances.

It is the second group of advice-givers that have the most potential for causing problems in client relationships.

When clients start to be guided more by this group than by your professional advice, it's best to reserve your time, energy and expertise for clients who value it.

If clients do not value what you offer them...fire them.

5. Indecision

Certainly changed circumstances result in changes in clients needs and wants.

However, when clients continually change their minds for no obvious reason, it's hard to be sure of what they really want.

If they don't know what they really want...how can you help them?

Is it not better to devote your resources to helping clients achieve what they know they want?

 

What other reasons might there be for firing clients?

What stories do have abut firing clients?

The Swing of the Pendulum.... What Borrowers need to know

As we all know - in years past; just about anyone could get a mortgage.  Of course there were standards; but they pretty darn loose.  A mediocre credit score; very little cash and even shaky job history - would get you qualified for a mortgage.

The Pendulum had swung so far - that my dog could have been pre-approved to buy a home!

Now things have changed.  DRASTICALLY !

I have had clients will PLENTY of CASH.  GREAT job history.  GOOD - even GREAT Credit.  But the hoops they are now having to jump through is getting simply - CRAZY !

Many of the agents in my office joke about buyers needing to supply a DNA sample when applying for a loan.  It's almost the truth.  Banks and their underwriters are being super-cautious when approving loans for people.  

The Pendulum is now at the opposite EXTREME!

 

Some things Borrowers Need to know:

- Work with a reputable lending institution.  With so many changes in lending standards - make sure you are using the best in the business.  Remember: Biggest is not usually Best.

-Get your loan officer every single piece of paper he/she asks for immediately.  Not quickly - but immediately.  They need every hour; every day to get things processed.

- Be ready for last minute requests.  An old tax form; an old check stud - keep all your important papers close at hand.

- DON'T move money around.  Large deposits or withdraws are big old RED flags to underwriters.  If you need to transfer money for closing.  Do it as soon as you can and preemptively send your loan officer documentation as to where the money was transfered from and where it was transfered to.

- The Banks are backed-up.  Period.  They have cut staffs and now are overwhelmed as the volume of sales and re-fi's are increasing. For many of the large banks - be prepared for long hold times and overall lousy service.  Even lenders whom I have worked with for years are victims by their own banks lack of resources and personnel to process the loans.

- The closing date - with so many delays and last minute requests from the underwriters - don't bank everything on moving the day after closing.  Expect a couple of day delay.

 

Lastly - be patient.  Easier said than done; especially in a big move; but it is the way things are today.

 

    

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

 

 

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