I was amazed by the number of comments on my Condition, Condition, Condition post. Most of you agreed that condition is very important in today's highly competitive market and I enjoyed reading some of the "war stories." There were a number of comments, however, that can be sumarized as follows. "The market is bad, many sellers are upside down and face short sales so there's no incentive to do anything."

Sorry, I don't buy that. I think Michael Ford says it best in his comment, "It's our job to show them how to get  the best bang for their buck. Most homes can be whipped into shape for less than $500." Really, that's why they hire us and why the agents who use imagination, talent, training and hard work succeed. It's an old adage in poker that a good player will lose less with bad cards and win more with good cards. A good agent will get more regardless of the market. Sure the current market is challenging and many sellers are strapped, but as several of you said, it doesn't cost much to clean, declutter, stage and do minor repairs. Painting a room can still be done for less than $50. If it's a short sale, maybe the incentive for Sellers is to be "less short." For us, the incentive is to have a listing that will generate a pay check.

If "Location, Location, Location" are the three most important words in real estate, the three second most important have to be "Condition, Condition, Condition." I was reminded of this again last week when I was working with a relocation buyer and over the course of two days, looked at 25 upscale homes in the Muncie area. My client had been out of the U.S. for several years and was new to the Muncie area so we visited homes with a broad range of styles and ages.

The differences in condition really stood out. Several were vintage homes with lots of space and charm, but one had a damp, musty odor and some obviously leaky windows that completely obscured the many updates and the terrific location. Another was filled with busy, out-dated wallpaper and had a cedar-shake roof that appeared to have more moss than wood. Both screamed,"maintenance nightmare."

Many of the homes that were 12-20 years old had outdated plumbing fixtures, paint and carpet colors. Others had ceiling stains from current or previous leaks. Poorly maintained decks were also frequent. Even in great condition, it's hard for these properties to compete with newer ones in newer subdivisions. In poor  or even mediocre condition it's impossible.

We looked at newer homes that were built in the last 5 yrs and even there some of the conditions were apalling. One in particular had great curb appeal, but walking up to the fron door we noticed the shrubbery was infested with bag worms, even to the extent of having bags on the railing and around the front door. Inside, the property had been beaten up. There were several holes in the drywall and lots of tape-joint cracks and nail pops. Needless to say, we didn't spend much time there.

It amazes me that some listing agents, even veterans, don't sit down and have an honest "heart to heart" with their sellers. In addition to the deficiencies noted above, many of the homes, regardless of age, were cluttered, filled with personal items and collectables and often just too much "stuff." People need to know what it takes to make their home competitive. After all that's what they hire us for. If done tactfully and authoritatively, sellers will not be offended and will thank us when the showing feedbacks come in.

The Muncie-Delaware Co, IN market has been stable through the first 3 quarters with average sale price up slightly and unit sales up about 1%. Looking forward, Pendings are up 46% at the end of Sept. vs a year ago and the DOM of Pendings is falling. I expect to end 2009 with about a 13% increase in units sold and a modest increase in average sale price. Inventory has dropped significantly adding to groundwork for a more active market in 2010.

We still have problems at the high end and condo-duplex sales have been disappointing, but 2010 has great possibilities for an active market.

At last weeks' sales mtg, our broker shared excerpts from a book he had recently read called "The Fred Factor." It chronicles the first encounter the author had with his mail delivery person upon moving to a new home. The mailman, Fred, introduced himself and volunteered a series of customer service activities the author had never before encountered. Without retelling the story, suffice it to say that the author was so impressed that he wrote about his experiences in a book about outstanding customer service.

We all know companies and individuals that provide outstanding service, including real estate professionals such as ourselves. However, there are those who seem to have never gotten the message. Recently, I've had three "Fred" encounters, two negative and one positive.

Last week, I had a referral appointment to a specialist physician to investigate a chronic cough. This was my first visit to this practice and as customary, their office called in advance to remind me of the appointment. What was not customary, however, was that the caller put special emphasis on my co-pay being due at the time of the visit. Many offices have notices to this effect, but I've never had it mentioned in the reminder call. I got to the office at the proper time and after filling out the paper work, was told the Dr. was running an hour late. I told the receptionist I wouldn't wait and when she asked about rescheduling, I inquired how often the problem occurred. She would not give me a straight answer after repeated attempts and then asked if I wanted to see the practice manager. I said "yes" and she got up and disappeared to another room. I waited several minutes and when no one returned, I decided that this was a practice that routinely over scheduled to maximize income and patient care was secondary. They need to read "The Fred Factor."

Today, the car charger for my cell phone went dead. I had just purchased it from a Verizon store 2 wks. ago while vacationing in Panama City, FL, and was certain that it was still under warranty. Receipt in hand, I went to our local Verizon store in Muncie, IN to get a replacement. I was greeted (a euphemism) by a non-smiling clerk who gave a cursory glance at my receipt and said it didn't come from there so they wouldn't replace it. I know the item is covered my the manufacturer, regardless of who sold it, so I pressed the issue. She consulted an equally ungracious manager and came back with the same answer. They need to read the "Fred Factor."

After leaving the Verizon store, I called the Verizon store in Panama City and explained the problem. The clerk said "no problem." He took my information and said they'd send me a new one today. No charge, no shipping, not necessary to return the old one. He read the "Fred Factor."

It's been several years since I've delt with HUD repos, but recently I have a customer who wants to purchase one. In preparing the bid for submission, I was surprised to see that the broker's commission,advertised as 5%, is a variable entry and is subtracted from the bid price. So are concessions such as closing costs, etc. I realize that when I run a net proceeds sheet for a seller, I list the commission and any other concessions, but the parties can then negotiate. There's no negotiation with the HUD properties, the buyer pays.

As representatives of the buyer, sounds like we need to disclose that whatever we choose to enter as a commission up to the 5% max. reduces their bid accordingly. Seems like it's counter productive to deal with these properties, which in our area are usually low-end, and to go through all the hassles of getting them closed while at the same time feeling we must take a minimum fee to help our buyer-client. I'm wondering if we need to utilize buyer contracts for proper disclosure in these cases.

Thoughts?

We've all heard the old question about a glass is half empty or half full depending on whether you're an optomist or a pessimist. Wonder how many of us think about that in terms of time? As we're nearing the end of June, is your year half over or is there still half left?

The market has been slow and I've heard a lot of comments wishing the year was over so we can move on to better times. We still see the endless stories in the media about poor sales and falling prices, usually referring to CA or NV or FL, yet many in our office, here in Muncie, IN are having a great year. Our average sale prices are holding steady, inventories are down in most areas and we're looking forward to a strong second half. Interest rates are good and expected to hold at or near current levels and the economy is beginning to turn around. The investments in time and effort that I made in Jan. on marketing and planning are paying off and I'm looking forward to the balance of 2009.

It never ceases to amaze me how many people in our business never learn or choose to ignore basic communication skills. I recently took a lisiting that had expired with another agent after being on the market for over a year. I had shown the home twice during the that year and both times came away with a negative response from my Buyers as well as myself.

It is a charming home in a terrific neighborhood, but it had poor curb appeal due to overgrown and unkempt landscaping and then inside, it just looked shabby. There were minimal, poor quality photos in the MLS, and no marketing materials in the property and no staging what-so-ever. I don't understand why a veteran agent would not communicate these deficiencies to the Sellers. When I met with them and presented a list of suggestions, they were astounded not to have heard them before. I am not a super star agent. I'm a mid-range producer who usually ends up in the top 10%, but a long way from the top. Yet, simple application and communication of some of the basics (preparation and marketing) seemed like a no-brainer.

In discussions with the Sellers I also learned there had been an accepted offer that fell apart over inspections. After reading the inspection report and reconstructing the negotiating process that led to the blow up it looked like the parties weren't that far apart. It looked like the process degenerated into a contest of personalities and misunderstandings that totally obscured the objective of reaching an agreement. It also became a contest between the agents and once again it appears that communications were definitely lacking. Both the Buyers and Sellers had unreasonable expectations and seemed to receive little constructive counseling from their representatives.

So, here we are with a Seller feeling abused and angry and a Buyer who feels like they are being taken advantage of. Yet, they are only a few thousand dollars apart on a $150,000 property when you cook it all down. The Seller wants to sell, they're relocated. The Buyer wants to buy the house and get settled. Neither has happened because of the lack of basic communications. As I said, it never ceases to amaze me.

Today and Fri. our office is undergoing training for Lead Router an automated lead generation and followup system being pitched by Coldwell Banker. There is no intial cost but the training is mandatory for participation in the program. Though free at the start, it looks like after a trial period, that a cost will be assessed in addition to referral fees. This got me thinking about all the fees we pay for the various "services" we receive and whether we're getting any value for our money.

As a Coldwell Banker affiliate, we pay 6% as agents and the Broker pays 2% above that. In addition, we can have an "enhanced" web page on Coldwell Banker.com for $99/yr. I'm sure that other franchises have the same or similar issues. We all get the "opportunity" to have an enhanced web page on REALTOR.com for well over a thousand dollars a year.

The cost of producing one of these enhanced web pages is in the initial programing. Once the format is established, there's virtually no incremental cost regardless of the number of participants. The sellers of these enhanced services try to convince us they are worth the price because of the potential benefits. I think they've taken a marketing lesson from the people who tell us that Bayer aspirin is different, even though it's chemical composition and strength is identical to drug store brands costing much less.

Whether it's our franchise fees or our NAR dues, we're not getting our money's worth. Our money funded the development of the basic web sites and the incremental costs are negligible. We shouldn't have to pay for them again.

This morning I read an excellent post from Richard Rector of Realty Associates in Phoenix. His premise was that the lower median home prices the media keeps harping about are the result of lack of sales at the high end rather than the fact that specific homes are selling for less. Credit issues on Jumbo loans have indeed choked off high end sales all over the country. In addition, every market has its high end, be it $250,000 homes or multi-million dollar homes and I venture all have seen reductions in sales volume.

Here in Del. Co., IN, our high end is priced above $300,000 and in a good year they account for about 3% of our unit sales. Over 85% of our sales are $150,000 and below so I look at average sale price as a more indicative reflection of activity. In the first qtr. of 2009, our average sale price was up nearly 6% over 2008, yet median sale price was down by 14%, reflecting a change in product mix rather than an overall decline in prices.

The media loves generalities and simple answers so they grab onto median price statistics and portray them as if they were universal. Unfortunately they are aided in this by the NAR and various state associations that publish statistics. Though it makes them seem authoritative, they are using our dues money to complicate our business lives. NAR and recently the IN AR should stop publishing general statistics and insist that media derive their data from local sources that accurately reflect the local nature of our business.

The quote attribted to Yogi Berra seems to apply to the recent announcement of plans to monetize the $8,000 tax credit for first time buyers. While details are non-existant at present, it looks like it would take the form of some sort of bridge loan. NAR and many of my fellow REALTORS are trumpeting this plan as a boon to our industry, but I have to wonder, "Isn't the opportunity to buy a home with no equity one of the things that caused the current housing problem?" Buyers with no stake and no equity are the first ones to walk away when the going gets tough, adding to the inventory of foreclosures that the plan was designed to reduce.

Home ownership is an investment and there's no other area where a person can make a substantial investment without equity. Commercial loans require 20%, even insured conventionals require 5%. Stock  or bond purchases require 100% unless it's  margin account, but even then a substantial equity is required and the security, unlike real estate is liquid.

In the panic of trying to cure the housing mess, it looks to me like we're heading back down the same road. "Deja Vu' all over again."