Ben's Blog

How do you know when the market is at the bottom?

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Fri, 22 Aug 2008 18:48:39 -0500

In my day to day dealings as a REALTOR® here is Boise, Idaho, a number of people are wanting to know "Are home prices going to continue to fall?" or "How will we know when the market has bottomed out?" I answer that question with a consistent answer, but one that always leaves people a little frustrated.

To me, the housing market is best forcasted by analyzing the numbers. The peaks and valleys of the market are due in large part to simple supply and demand. When supplies are low, demand, and price, increase accordingly. When supplies are up, as in our current market, demand, and price decrease. So all we have to do is monitor the inventory numbers and when they start going down, we know the bottom has been hit right? Well hang on a second...

Another factor that has led to our slower market in Boise, and across the nation, has been the major changes that have occurred in the credit arena, home mortgage lending specifically. As a REALTOR® I am always on the lookout for ready, willing, and able buyers. For years the ready and willing buyers were not hard to find, but able buyers were a little harder to come by. But by 2004 lenders were offering a plethora of exciting new loan programs that helped a number of these ready and willing buyers, become able to purchase a home. Unfortunately many lenders became a little bit to loose with their standards, and made able buyers out of people that had no business purchasing a home at that time. What followed were large problems for most lenders, and massive reform in lending guidelines. So how does that affect our current market?

Along with high inventories of homes, the market is dealing with a couple of issues in regards to the home buyers. There are many buyers now who are able to purchase, but right now don't know if the time is right, so they are no longer ready and willing. These are some of the people that are posing the initial questions. What is also happening is that there are many people, especially first time home buyers, that are ready and willing to purchase, but with the strict lending guidelines, are no longer able to purchase.

So to sum it all up, we have a large supply of homes, and less demand, which has caused pricing to adjust down. We have many buyers who are skeptical of the market, and not sure when it is going to be o.k. to purchase a home again. We have other buyers who would like to purchase, but cannot because of strict lending guidelines.

Here is what I am observing in the market as of this post. Inventories in Ada County were down in July 2008 from July 2007. This is the first time that the current years inventory has been less than the prior years inventory all year long. Housing has become more and more affordable in this area, and has opened up the option of purchasing to a number of buyers who were priced out of the market during the peak. Now these are good signs for the market, but I'd like to see a few more months of decreasing inventories before I will feel comfortable telling buyers or sellers that we are out of the woods. But remember...

It is going to be hard to time the market perfectly. Right now some sellers, especially some builders, and banks, are showing a willingness to cut their losses in a sense, and are offering substantial price reductions to willing home buyers. Buyers right now are buying homes at or below 2004 levels, which in my mind will only last until we have purged our inventory of foreclosure, and bank owned properties. So keep a close eye on the market, and keep coming back to my Boise Housing Market blog for updates!

When is Enough, Enough? Ethics Concerns

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Wed, 30 Apr 2008 13:35:09 -0500

Any real estate agent that has been in the business for multiple years has inevitably gone through the following situation, or something similar. I'm just curious what you would do in this scenario.

I had a newer agent in my office come to me with a concern the other day. He had just cancelled a luxury listing that he had been trying to sell for a couple of months. The owners were going through a divorce, and are within months of losing the home. This agent tried and tried to get them started down the lonely road of short sale, but they would not cooperate.

Long story short, he gets an email from them saying they no longer need his services, so he cancels the listing, no questions asked. A few days later he realizes that the new agent that listed it had accessed the home just 2 days prior to her taking over the listing. After speaking to the husband, he finds out that the agent that took over the listing had contacted them and told them she was a short sale expert, and that if they needed her services she was happy to help. Yep, a total violation of the code of ethics!!!! She now has the property listed $400,000 less than what they had it listed with our office.

But what advice do I give this poor guy. Does he go through the time and energy of submitting an ethics claim, or does he just let it go. He's between a rock and a hard spot in my eyes, because more than likely the claim will not result in any punishment, and will take away from time that he could be spending being productive. But if he doesn't this agent gets away with this, and might continue to practice this way.

What would you guys do?

What advice should I give this agent?

Help! When and how do I hire help?

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Fri, 25 Apr 2008 17:02:33 -0500

I really appreciate all the advice and information people so willingly give on Active Rain. I love being able to write about some issues, or concerns, and get great advice from people who know what I'm going through, and have ideas of how they would handle things.

That being said, here's what I need help with this time. I've been actively selling real estate for 8 years. I'm not a mega producer, but I'm consistently a Top Producing agent in my market. My question is how do you know when its time to hire an assistant, or buyers agent, or whatever. The Boise, Idaho real estate market has been a little soft over the last year to year and a half, like a lot of markets around the United States. My business has stayed pretty consistent, and through some of the slower times I've been able to roll out some of the marketing ideas that I'd been brainstorming for a while, but never had time to incorporate. That being said, our market here in Boise is beginning to show signs of life again, and my schedule is beginning to get full and hectic again. My concern is that along with these programs that I've rolled out, I've had a substantial increase in maintenance, etc. to keep these programs running smoothly.

For those of you that have hired assistants, formed teams, etc., when did you know it was time, and how did you go about finding good, quality people to help you. What position did you hire first, and what responsibilities did you delegate. Also, what kind of compensation did you offer, salary, hourly, bonuses, profit sharing???

I know I need help, it just makes me nervous to think that someone will be relying on me for their income.

I welcome any advice, and any input you think I need to make an informed, intelligent decision here.

Custom Sites or Template Sites? Which way do I go?

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Fri, 11 Apr 2008 13:31:24 -0500

I know there are a ton of different companies out there that cater specifically to real estate industry websites. I've spoken at length with about 4 of these companies, as well as a couple of custom web designers. I'm trying to decide which route would be better. Here are the pros and cons that I have come up with.

Custom Sites

+ Ability to have more input on design, layout, content etc.

+ Ability to have a few more bells and whistles. (Flash etc.)

+ Designed around your branding (Logo, etc.)

- A lot more expensive. You don't get the bulk pricing like the big boys

- Slower design period. You have to come up with a lot of content. (Text, pictures, etc.)

- Deal with more companies, (Hosting companies, design companies, SEO companies)

Template Sites

+ Quick. You can have your site on-line as quick as a few minutes, to a few days.

+ Less time consuming. A lot of content is already there for you.

+ Less expensive. You really do get a lot for your money

- Less flexibility on design.

- Less originality.

- More corporate atmosphere. On hold with customer service a lot.

I need advice! Let me know which direction you guys went, and if you regret it or not. I'd like to look back a year from now and know that I made the right decision. Thanks in advance for your help!

22 Things REALTORS(R) Do To Their Own Homes To Prepare Them For Sale

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Wed, 02 Apr 2008 18:22:44 -0500

Real Estate Agents know how to get top dollar for their own homes. After all they package, market and sell homes for a living. In detail, here's what they do to their own homes to prepare them for sell:

The Exterior

Agents understand the importance of "curb appeal". To beautify the exterior of the home, they focus on the driveway, entranceway, landscaping and front door.

1. The front lawn and shrubs are manicured. Gardens are mulched.

2. All Clutter is removed from the front lawn.

3. Cracks in the driveway and walkway are fixed.

4. Gutters and downspouts are cleared and in good working order.

5. Chipped or fraying paint on door and window frames is removed, and fresh paint is added.

6. The front door is painted or replaced if needed.

7. There exterior of the house is painted if needed.

The Interior

8. Walls are cleaned so there are NO smudge marks. If the paint is dingy, the wall MUST be painted. Light colors are used to make the house appear larger.

9. Carpets are clean and in good condition. Otherwise, get rid of them.

10. The windows are thoroughly cleaned. Buyers like to look outside the windows. The windows and screen doors easily open and close and are in good shape.

11. All clutter is removed.

12. All clothes are placed in the drawers and neatly hung in the closets.

13. The kitchen is thoroughly cleaned. The cabinets, counters, and appliances are thoroughly spotless. All clutter is removed. Dishes and glasses are neatly stacked in the cupboards. There are NEVER any dirty dishes in the sink or on the counter.

14. The closets are reorganized so they appear larger. Some clothes are removed if necessary.

15. Furniture is removed and either put in the basement or into storage. This makes the home appear much larger. You NEVER want to make it difficult to walk through all the rooms in the house...clear the pathways!

16. Electrical and plumbing are in working order.

17. Broken appliances are fixed.

18. The garage door works perfectly.

19. Curtains are always opened, window shades always up and lights always on (including lamps, hallway lights, etc.) when the home is being shown (even during the day). The combination of sunlight and artificial light helps make the home appear larger and open.

20. A fresh scent is always used to appeal to buyer's senses. Vanilla is one of the most frequently used scents in builder's model homes. You can buy vanilla air fresheners that fit directly on your air filter (available at Home Depot).

21. Pet odors are always eliminated!

22. Soft jazz or classical music is always playing on the stereo when buyers come through.

Caution! Never do excessive work!

Many sellers think the more fix-up work they do, the higher the price they will get. That's not true. Beyond the necessary fix-ups, you can easily start wasting your money. Never do any unnecessary fix-ups prior to selling.

Are we professionals?

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Mon, 31 Mar 2008 12:13:54 -0500

While taking a Real Estate Law class last week, the attorney that was teaching the class made mention to several different careers our state (Idaho) classified as "Professionals". Doctors, Lawyers, Accountants, Phamacists, etc. were named. Real estate practitioners or brokers however were not included in this class. I was immediately offended, but the more I thought about it, the more I leaned towards agreement with our state.

I believe that our industry as a whole needs to put a much larger focus on education. I don't know if increasing the requirements to get a practitioners license is the solution, but continuing education is key to staying on top of this industry. There are amazing speakers out there with a world of information they readily give participants of their classes and seminars. My real estate I.Q. has been bolstered substantially due to the continuing education classes that I have taken.

I also believe that a manditory mentoring period should be required. I think a large part of the problems both legal, and public opinion, are caused by not putting any restrictions on brand new licencees. There are a percentage of new agents that will survive and flourish, but a large percentage will fail, and on their way out might tarnish the reputation of the industry as a whole.

Most issues people have with REALTORS(R) is that we do not act like professionals. They view us as part time, money hungry, get rich quick slackers. And we can't expect them to view us as professionals when many within the industry don't view themselves as professionals. How do we get others to view us as professionals?

How to get feedback from showings on your listings.

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Sun, 30 Mar 2008 20:34:59 -0500

I don't know about you, but I really don't have the time or the patience to have 20 different conversations with agents every Monday regarding "The showing you had on my property on blah, blah, blah." I know you know what I am talking about.

However, I do understand how important it is to receive feedback on the showings you get on your listings. The seller ALWAYS wants to know how the showing went, and where their offer is. Also, I appreciate having the advice of other experts in my market on ways I can improve my listings to help them sell quicker and for the most money.

So, here is a solution that I've found to be much more reliable than trying to track down all the agents that have shown your property. It also relieves the anger you feel when you leave them MULTIPLE voicemails and don't get a return call.

Go to www.showingfeedback.com. This is a free service that will email a survey to the agents that have shown your listings. Also, you can set it up to email the buyers agents comments directly and uncensored to your seller. (Be careful here) This has been an invaluable resource for me in getting price reductions. And, I'm not the bad guy telling them their price is too high. Its the agents that are showing their home that are telling them all the sticking points that their buyers didn't like.

If you don't have a system in place to get feedback, please, please use this or something like it. I've found that agents will almost always get back to you via email with some feedback, but rarely will they return phone call messages. Plus its another service that you provide directly to your sellers. Works great for me, give it a shot!

Did terrorism and 9/11 cause the housing market mess?

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Sun, 30 Mar 2008 19:31:27 -0500

A few weeks ago I ran across a story with this title on MSN.com. My first reaction was that a statement like that was ludicrous. So I opened the story and skeptically began reading. Now, I don't know if the writer convinced me totally, but he definitely made me see things from another angle.

The writer started off by bringing up some facts. After 9/11 people were justifiably concerned about, among other things, their investments, and the stability of the markets. This caused a massive plunge in the stock market, and the housing market to slow considerably. The Fed jumped in and over the course of a number of months, lowered the interest rates to stave off recession, and to spark consumer confidence. (Sound familiar?) Rates dropped to historical lows, which caused many people, especially investors, and speculators to move their investments from the stock market to the housing market. What followed was an incredible time in the real estate industry. Loans were easy to get, and home prices were appreciating at remarkable rates. And everyone got caught up in it. REALTORS (R), Lenders, Builders, etc., and before anyone could stop and take a breath, the unsustainable growth has crippled many markets, and the infamous "housing bubble" had burst.

This writer made the connection that if it wasn't for the terrorist attacks on 9/11, the Fed would not have needed to drop interest rates so low, the housing market would have continued to increase at mediocre levels, and the housing bubble, and the credit crunch would not have happened.

Like I said, I think it is a little bit of a stretch, and there were definitely MANY other factors that contributed to the housing correction, and the credit crunch. But this story, as far fetched as it sounded when I read the initial title, had me walking away scratching my head and thinking "Could terrorism and 9/11 have contributed to the housing market problems?"

What Type of Home should I buy? Pros and Cons.

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Sat, 29 Mar 2008 14:06:37 -0500

There are a number of things to consider when you're buying a home. First, where do you want to live? If you have a growing family, maybe you want to live in the suburbs? This can obviously affect your commute. Is this a neighborhood where you want to live? Also consider the investment value of where you want to live. Make sure the area has been holding its value well.

Then, there's the question of what type of home you want to buy. This will also depend on your lifestyle, but make sure you are buying the right type of home, in the right area, based on investment value. After all, buying a home should be an investment. This article discusses the potential benefits and drawbacks of each particular type of home.

An old home versus a new home

It may appear that newer homes are better investments. After all, they're brand new...everything is sparkling. The layouts are consistent with today's styles. And the neighborhood amenities (for example, pool, recreation centers and shopping) make the neighborhood very convenient. Furthermore, you've probably heard that most new homes appreciate from the minute you buy the lot.

This is not always the case! From an investment standpoint, older resale homes can offer just as much, or even more opportunity for price appreciation. First, older homes are usually closer to the city, so they are often in convenient areas. Secondly, many older homes actually have better quality construction than today's newer homes. On older homes you're likely to find slate roofs, copper gutters, chimney flashing and hardwood floors. Finally, older neighborhoods are established, which means, "what you see is usually what you get." You usually won't find a lot of new construction in your neighborhood that could affect the value of your home.

On the down side, older homes may not have the coolest floor plans. The kitchen and bathrooms may be outdated in these homes. Finally, unlike newer homes that are usually maintenance-free, you may incur repair bills after buying older homes. Again, the newer homes have downsides too, including possible poor workmanship, poor location on the fringes of suburbia, unsettled neighborhoods and cookie-cutter appearances (lack of charm).

Your real estate professional will help you make the best decision. Both older and newer homes have advantages and disadvantages, but both can be excellent investments.

Should I buy a single-family home, condo or townhome?

The answer to this question depends greatly on your lifestyle, but each type home has different investments potential. If you have a growing family, you will avoid a condo. Likewise, if your family is small, you have few or no children, or your children are grown up, you may not need the space of a single-family home. A condo may offer you more convenience.

An important consideration is the largest percentage of buyers end up buying single- family homes. In other words, most families have children and a lot of "stuff" to store, so they want single-family homes. Therefore, single-family homes are often easiest to resell and have higher price appreciation potential. Townhomes and condominiums also can be excellent investments. Just make sure you buy one in an area that is likely to see price appreciation. Your real estate agent can show you data of what types of homes recently sold in different areas, as well as what type of homes are seeing higher price appreciation. Remember, your home purchase should be an investment decision!

How to shrink that long URL link. TinyURL.com

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Fri, 28 Mar 2008 19:44:23 -0500

This information is thanks to Allen Hainge of Cyberstars fame. In a recent seminar he addressed something that had been a pet peeve of mine for a while. Everyones recieved the email with the 3 line URL link right? Well go to www.tinyurl.com and for FREE, we all like that, you can paste the mile long link, and it spits out a tiny one that you can post in your emails, or any other place. Works like a charm. Good Luck!

How To Pick The Hardest Working Agent In Your Market

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Fri, 28 Mar 2008 19:20:30 -0500

You've probably heard a family member or friend say, "I'm going to get into real estate and make a pile of money!" That's probably why there are so many "real estate agents". In some cities, almost one percent of the population either has or at one time had a real estate license.

The truth is, you can make excellent money selling real estate - but few agents actually do. Most agents are part time. And only a small percentage of real estate agents do the majority of the business.

You need a full-time real estate professional who loves to sell real estate. For them it isn't work...its pleasure. They are up by seven every morning, out in the field, going to preview other agent's listings. They know the inventory in your market. And when it comes time to sell your home, your agent packages and markets the property well. Your agent is at local board meetings, pushing your home to other agents. And you need your real estate professional...after all, if you have a $20,000 tax question, you would seek an accountant's advice, right? If you have a $275,000 real estate question, you need your real estate professional!

A real estate agent must know the local marketplace. This takes years of studying the markets and continually staying apprised of what homes are for sale. And while you are looking at the décor, layout, and functionality of homes, they are looking for structural soundness, resale ability, and appreciation potential of the property.

How do you find the agent who is truly excellent?

Pay attention to the agents who continually "farm" your neighborhood. This includes informational reports, post cards, just listed and just sold post cards, calendars, holiday cards, etc. Most agents who work that hard to earn your business by spending the time and money to consistently mail you will also work equally as hard to sell your property. They're motivated and hard working. Most real estate agents will tell you privately that these "marketers" are usually good real estate agents. When you are ready to sell, whether you have a cousin who is a real estate agent or not, you owe it to yourself, and your family, to pick up one of those pieces and at least call the good real estate agent for an interview. This is a business transaction!

Referrals from friends and family can be another way to find an agent. But be weary! Friends may receive some type of compensation for recommending their favorite agent.

Furthermore, just because the agent is a good family member or friend doesn't mean they are a good real estate agent. Your friend or family member may be recommending this agent out of a sense of obligation. This is a business transaction. You need a competent professional!

Finally, keep an eye on yard signs in your neighborhood. If a particular agent has many different listings in your neighborhood, the chances are good they are in contact with buyers looking in your area.

What to Ask Them

Once you've done your research, call each agent. Pay particular attention to how long it takes them to call you back. You want a real estate agent who promptly follows up with buyers! Also, get a feel for their personalities over the phone. Do you think you can work with each person?

When You Finally Meet

Ask your real estate agent to discuss their marketing plan. How do they plan to sell your house? If the agent does not discuss marketing channels like the Multiple Listing Service, sending your home "fact sheet" out to the agent community, classified or magazine advertising, and Internet advertising, most likely they don't have much of a strategy. The marketing program is critical to generating demand for your home! Once you're confident in the agent's strong marketing plan, make sure the agent walks you through a "seller's net sheet," clearly explaining the numbers and what you can expect to receive from the sale of your home. After investigating your home and researching the competition, they will recommend a narrow range of prices. Of course, you ultimately determine the selling price, but your agent's recommendation indicates at what price your home will actually sell.

ARE WE PROFESSIONALS?

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Wed, 26 Mar 2008 13:11:35 -0500

Check out Epinion.com before you buy..

Ben Myers, Broker, GRI, SRES, Boise, Idaho (Rocky Mountain Real Estate) — Wed, 26 Mar 2008 11:00:58 -0500

www.Epinion.com.

I have saved myself a lot of pain and suffering, not to mention money by learning from others mistakes. Nice place to get a feel about how others feel about the product they purchased, just might save you the headache of buying the wrong thing, or could help you justify getting that new "must have". Check it out, hope it helps!