 Every time I talk with a new client about selling their home, I get the same comment, "Todd, my home just isn't worth what is was four (4) years ago, so why would I want to put it on the market?" or, "So I put my home on the market, there's no way I'm going to get what it's worth." Here's a good one, and one of my favorites, "In 5 years the market is BOUND to recover a bit. I'll sell then." I pride myself is calling it straight, so here are my comments... First... Yes, your home ISN'T worth what it was four (4) years ago. Would it have been great to sell your home for TWICE what you paid? Of course... For the 10 minutes after you sign the paperwork, you would be feeling amazing...! REALITY BREAK MOMENT In the home frenzy between 2002-2007 you might have been able to sell your $100k (original cost) home for $330k. I fall into into this category. If I had sold (lured by the money), I could have pocketed a TON of cash. Paid off some loans, bought some toys, cleaned up any lingering credit cards. Hey, I could have started over in many ways. I would have also been looking for another home... So here am, looking for another home. Surprise, Surprise... All the homes I'm now interested in purchasing have also tripled in price. I wouldn't have been alone. This happened a LOT..! Homeowners sold, only to find that the homes they could "afford" (based on their income), weren't AS NICE... The only thing that basically stayed the same? Everyone's INCOME...! Yes, the banks were a bit loose with money back then. I could have wiggled my way into a loan for the $600k home, but my payment would have TRIPLED..! All the money I "made" on selling my home (what was left), would have went right back into the home I purchased. The difference? Well, my new home was pretty much what I sold, only with a higher mortgage...!  TODAY'S MARKET Your home is now worth $180k, much lower than the market highs. However, the home you're looking at (you know, the one above) is now selling for $300k (maybe less if bank owned). You crunch the numbers, and "low and behold" you can actually afford to make the move. Some (Not many, since my clients are the smartest in Phoenix) of my clients loose focus on what goes into buying a home. It comes down to basically the following points...
Questions 1-5 are important, but those are FACTS of buying ANY home. Number six (6) is the MOST IMPORTANT. Number six (6) is DIRECTLY related to how much you're spending. The price of the home you're buying. Your TOP DOLLAR... If you focus on your home, and not the home you're interested in, you're going to make a HUGE mistake..! Yes, we all hope the market recovers. But when it does, the home you're looking at is going to head up in price too... It'll become more expensive, and possibly out of your budget. So, is it a good time to sell, even if you're home isn't worth what it was back in 2007? Yes, because everyone took the SAME hit, making your dream home now affordable. |
Market TRUTHS..!
What are the DIFFERENCES between Agents?
What are the DIFFERENCES between Agents?
 When I sat down, during a semi quiet moment at home, and told my wife about my idea for this article, I was unsure what type of reaction I would receive. I was greeted with a simple smirk. My wife lives outside of real estate. I joke she has a "real job". Set hours. A desk, around other people. Lunch breaks. Set hours. You know, a "real job." So she's always looking at my ideas from a slightly different point of view. While she's more than versed on why I'm "different", she thought the article wouldn't come off as something unbiased... With this burning at my brain, I'm going to give it a shot. You locate an Agent. Maybe it's a friend, or friend of a friend. A referral. Simply, you hire an Agent to do one simple thing. Sell your house, or find you one. Maybe you've been doing some research online, and have found it pretty easy to locate properties, or compare yours, to others on the market. It was "Easy", so as long as your Agent is breathing, they'll do... HUGE MISTAKE Is it HARD to locate something for sale online? Nope. Is it tough to open the door, allowing you to walk through? Nope. Tough to point out the number of bedrooms? Baths? NOPE..! Honestly, there are times leading up to the negotiation phase that I want to simple melt into the walls...lol. My clients know what they like. Typically they explain it pretty clear, making my job easy. Everything leading up to the actual "negotiation" phase is more time consuming, than work. Now to my point... Real Estate Agents have a LOT in common with Sports Agents... I get a strange look every time I explain it this way, but I feel it fits, perfectly. A Sports Agent represents an athlete who has a set talent. His/her job? To market that talent against all the other talent on the market. Oh, and to negotiate the best deal possible. If you're selling your home, your "Agents" job is to market & point out all the POSITIVES. Like a Sports Agent, your home needs to appear "Special", or one of a kind. How is your home going to make the buyer happy? More happy than the house down the street. Highest priced? Well, your Agent better show the buyer WHY! Want a tip? No one is going to part with their hard earned money unless they SEE A REASON TO SPEND MORE..! Like the baseball player that hit 40 home runs, the Agent better point out that he can also catch... What if there's an issue? Well, the Agent better understand how to down-play the negative, and up-play the positive. If you hire an average Agent, well, expect an average result. You'll get less for your home, or sticking to the sports analogy, you'll get a smaller contract... My "Job" as your Agent is to market your home like it's a Super Star. The only way you do that, is to NEVER do "anything" like everyone else. If you have a great pool, then it's my job to show that pool off. Your pool should equal dollar signs. You don't accomplish this by simply taking a photo. Even a SUPER nice photo... The 50 thousand dollar kitchen? MONEY..! If your Agent simply does what everyone else does, how is that going to make your home "Special"? How can your Agent expect to get top dollar? A Sports Agent might have a great prospect, but if he doesn't show how high, far, fast, accurate their client is, there's no HUGE contract out there for average...! My job is to PLAINLY SHOW why your home is a BETTER fit than EVERYTHING else out there. Why your home is going to make the buyer "Happier" than the other homes they've seen... ONLY YOUR home can have this effect. Oh, and here's WHY..! OK, you're on the other side. You've found a home you like, and you WANT IT. My job is to "expose" how this home is simply one of many, and to push for the best deal possible. What if you find a home that "is" the best of the best. The Agent representing the home (yes, the home. No one buys the homeowner...), understands he/she has a winner. Coming to a compromise is an art form. It's a talent. Expressing how an agreement benefits BOTH SIDES doesn't just happen... I HONESTLY understand that every client is different, and that there isn't a single script. I hope you give me a chance to show you how I do business. VERY FEW Agents are alike... |
I'll Sell It, or I'll Buy It... REALLY?
 There are a "few" real estate agents out there who have decided to implement the "I'll sell your house in 60 days, or I'll buy it!" program. I've been fielding questions on this approach, so I thought I would toss in my two cents. Are they illegal? Well, anything can become illegal if you break the law doing it, but the way these programs are designed, they are perfectly legal (read the fine print). ALL OF THESE PROGRAMS have a wide range of conditions you must MEET to "qualify". I'm going to mention a few, but ANYTHING can be included, as long as it's disclosed to the seller (you) when the deal is struck.  The Seller must agree to the Agents price recommendation. Again, the Agent wants your home to sell, and in order for this to happen, it must be priced right. Comparable homes in the area will be looked at, and you'll be required to price your home 5%-10% BELOW market value. By the way CMA's (Comparative Market Analysis) are more of an "art-form" than a science. Five Agents could have a slightly different CMA on your property. In other words, an Agent could have a CMA that is 5% below market, and be able to explain why (in his OPINION)... - If you disagree, the Agent will still offer to list your home without the contract). The Seller may be required to agree to a graduated price reduction. You've agreed to a below market sales price, but after 10 days, no offers. At this point it's time for a reduction. EXAMPLE: If after 10 days no sale, the price drops 5%, or set amount. Another 5% after 20 days. 30 days, another reduction. Completely legal, if disclosed up front. Imagine what your home will sell for after 50 days, and possibly 5 reductions...? Of course it sells. - If you disagree, the Agent will still offer to list your home without the contract). Anything goes when it comes to these contracts. The contract could include provisions stating your home must remain "sellable" during the contract. If the Agent does an inspection (which you also agree too), and finds "what he feels" is a HUGE problem, they can cancel the contract (if it's not resolved to his standards). It's much like the "inspection period" when you're buying a house. This is an "out" built into the contract for the Buyer. The same goes here. - If you disagree, the Agent will still offer to list your home without the contract). ANYTHING is fair game. The contract could require the Seller to make a Facebook entry every week. Park cars inside the garage (clean it out if it's full of stuff - not a bad idea anyway). Limit children toys to a single room. Hold open houses EVERY weekend. Allow Agents to show the house at a moments notice, and have the home "sellable" as outlined in the contract during these showings... If the Seller fails to abide by the contract, it's void. - If you disagree, the Agent will still offer to list your home without the contract). Are these programs a scam? Simple, not if EVERYTHING is disclosed. Let's face it, us Agents make our living SELLING homes, not buying them. We also face huge challenges in accomplishing this goal. Homeowners and Agents don't always see, eye to eye, on many points. These contracts put the Agent in charge, and leave the Seller to simply follow along.  With that being said, there are SELLERS out there that agree to follow these contracts. Most NEED a fast sale. They're moving, bought a second home, and can't afford two mortgages. Divorce. Parents home after their death. Loss of job. Disability. Whatever it might be, they're willing to do ANYTHING to sell their homes, and they don't mind taking a back seat to the person getting it done. A GUARANTEE sounds good, and in their minds takes away some of the stress. Do I recommend them? I don't have an opinion. I'll admit, there are times when having this much control over a sale sounds GREAT..! However, I feel that terms can be agreed upon without a complex contract. If my client needs a fast sale, but they aren't willing to make the changes to their property to make it happen, I'll simply walk away. Chances are if I offered them a contract with a guarantee, the terms wouldn't be met... Putting something on paper doesn't always guarantee success. Why do Agents go this route? My comments, and those of Agents following these programs, will be VERY different. I've attended seminars (Craig Proctor) where these programs have been outlined in detail, and they don't center on SELLING your home. It's about you, the home owner, CALLING the Agent. While the program exists, it's about generating a sales lead. A guarantee is a GREAT "call to action" (sales lingo for motivating you to do something). A way to get you to call. Even if you choose not to follow the program, you're having a conversation ABOUT SELLING YOUR HOME! It's now up to the Agent to "sell themselves" to you at that point, and get your business. Put the apparent NOBLE gesture of offering a guarantee on the back burner, it's simply comes down to you dialing their number. Final thought. VERY FEW Agents end up buying their clients home. Either it sells, or the contract is broken. If the Agent does buy, it's WELL below market. It has to be, since they have expenses above and beyond the purchase (up-keep, Realtor fees, improvements). Know if you're considering a program like this, you might take a hit on the sales price. At the end of the contract period (if all terms are met), you're home will be gone. If you went without a contract, the "right" buyer could appear on day 62, buying your home at fair MARKET VALUE. |
What if you want to SELL..?
| What if you want to SELL..?
"OK Todd, you have ZERO issues talking about what 'Great' deals are out there, but what about us that want to sell? Are we going to take a hit?" This is a question I get asked everyday. Even buyers ask me this, since many have a home they're looking to sell, before they can buy. Pre-2002 Owners Here's the simple answer, and like anything, there are ALWAYS exceptions to the rule... If you bought your home before 2002, you're most likely OK when it comes to resale. Sure, it's not worth what it was on the market 5 years ago, but you're most likely into it LESS than what it's currently worth. Example, I fall into this category. I purchased our home in 1994 for about 100k. If I had sold it in 2005 (we almost did...!) homes exactly like ours, just feet away, were selling for 360k. Oh, and they were on the market less than a week... Today, I would expect somewhere around 190k. Shocking to think that my home has taken a 170k price hit in the last 7 years... The upside is that if I had sold, and bought something larger, that home today would be worth 50% what I paid, and I would be underwater like so many of my clients. After-2002 Owners If you purchased after 2002, and before 2010, you've taken a hit. That's it in simple terms. Is your home worth less than you paid? More times than not, yes. Say since you've owned it you've done improvements. Put in a pool, updated the kitchen, baths. Is the picture looking any better? Well, it depends. If a buyer LOVES what you've done, maybe. If it's their taste, exactly, then you're going to get some of that money back. But here's the reality, if you're home is priced too high, the typical buyer is going to buy the home down the street for 40k cheaper, and put in their own dream kitchen and bath... So, is it a good time to sell? I still say YES, and here's why. Lets say you bought your home in 2005 for 300k, and you put the standard 20% down (60k) so you now owe something like 200k to the bank (you paid down a little of the principal). Homes in your area are selling for 240k. By the time time you pay me (the Realtor) and all the fee's, you're breaking even... Yes, you've lost your down payment, but at least you don't owe anything to the bank once the home is sold (short sale). This is where the other side of the coin comes in... The home you want to buy is a Short-Sale, Bank Owned (REO), or just a standard sale(just like you). It's twice the size of your current home; needs work, but is still VERY nice inside. It's right at the limit of what you can afford, 400k. Now remember, we're talking about a home, that when you bought your old home in 2005, was somewhere North of 700k. You get the financing, and you've now moved up to a larger home, but AT THE BOTTOM of the market. I DON'T have a crystal ball, but I think EVERYONE is in agreement that home values are near the bottom. With this being said, the home you just bought could very well be worth 20% more than you paid in 5 years (a 4% a year increase - we were at over 20% during the boom). The math on that is... a 80k increase. Here's the kicker, if you had stayed in the first home, you would be simply breaking even... It's not entirely about what you SELL your home for, but rather WHAT you're buying on the other end... If you're selling to make money on the direct sale, the chances are you're not going to be happy, even if you bought before 2002. If you're reinvesting, there are opportunities. |
2012.. Better..? YES, if you Market..!
2012.. Better..? YES, if you Market..!I'm a FIRM believer that often EXCUSES get in the way of actually doing something. It's easy to point at various events/happenings and blame those for not getting something done. The challenging housing market has been a HUGE excuse for many Realtors who refuse to change with the times.
Granted, this is an overly general comment, and isn't meant to encompass EVERY scenario, only to point out the obvious... There are a ton of people looking for an EXCUSE, rather than a SOLUTION.
I personally feel that 2012 will remain challenging. I've heard a few fortune tellers out there, claiming 2012 is going to be a breakout year in the housing market. I would love to see their crystal ball... I break down my view of the market in this way...
First, if you have a nice home, and
it's marketed well, it'll sell. I did a search the other day for
Realtors who do video on their clients properties. Out of a general
search with over 10,000 results, only 240 had video. Out of this
240, only 2 (yes, 2) had someone actually in the video pointing out
features. Oh, and those two were on million dollar plus homes. The other 238 just walked around holding the camera... I guess this was to allow us (the viewer) to get a view as if we were there. I don't think it works very well.
I spent 2 hours playing these videos, and only a few came across as “helpful”. Why did I spend 2, looong, hours clicking on video links? I was hoping to find something interesting I could possibly use in my videos. I didn't find anything...lol.
I spent 2 hours playing these videos, and only a few came across as “helpful”. Why did I spend 2, looong, hours clicking on video links? I was hoping to find something interesting I could possibly use in my videos. I didn't find anything...lol.
While I would like to think what I do is special, PLEASE..! When I've asked other Realtors why they don't take more effort, the EXCUSES abound. They either have a dated system that they're comfortable “Selling” to their clients, or they're embarrassed to be in front of the camera, or they simple refuse to spend the extra time.
Back to my main point. I feel 2012 will be the year homes will continue to sell, but only those that are marketed with EVERY new, and now “mainstream”, venue.
You know what, I'll give you a quick example. To the left is the image I use for my vacation rental on Facebook.
Most people have heard of Facebook. By using Facebook for a HOME, you can add a TON of information otherwise missed. I now create a Facebook page for EVERY cliet, listing additional photo (with captions) Video, I even ask the homeowners to post interesting information on the “Wall”. Information on the local schools, parks and shopping. Also, personal messages on why they liked living there, and sometimes why they're leaving (move, downsizing, etc.). Those that visit get a WAY more rounded picture of the home, and the AREA it sits in... This sparks interest, and many times a visit. Visits lead to sales...
Oh, and then there's YouTube.
Yes, 2012 will be a good year to sell your home, and a great year to purchase. Whether you use me, or another Realtor, make sure they market your home effectively, in a way that makes sense to you...
REO - Bank Owned Under $70,000?
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Gilbert, AZ - Sub - $65,000 REO (Bank Owned)
Gilbert, AZ - Sub - $335,000 REO (Bank Owned)
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REO – Bank Owned Property What's the REAL take on REO properties? Are they really a great deal? Like anything else, it really comes down to how you're approaching the opportunity. Not always, but much of the time REO properties need a little work. A little love. Those that gave up the house/property (foreclosure) might not have been in the best of moods. This might appear in the way the property presents itself. I've seen entire kitchens missing..lol It's super common that appliances are gone, yards are over grown ( this part is getting better), and the strangest colors make it to the walls. The KEY HERE is to look PAST these issues. The minute I walk into a home, I feel like I have ex-ray vision. I could careless about the paint, flooring, bathrooms, and even the kitchen. I focus more on where the rooms are located, what the general flow is of the house (even this I like to change), and what the neighborhood looks like. Most things you can change, but where the foundation is poured is a bit more challenging...lol. There are three types of people. Those that can handle doing a renovation, those that “think” they can handle a renovation, and those that won't last 10 minutes... I call the first group the “Ten Per-centers”. Most of us “think” we can handle a renovation, but the honest fact is, most can't. Does this mean if you can't hammer a nail you shouldn't look at REO properties? Well, maybe. On most REO's the costs can balloon out of control if you hire everything out to sub-contractors. Now, if you're talking about paint, flooring, and not much else, you'll be fine. Start adding plumbing, wall removal, and electrical it's becomes a potential money pit. Are any of the above too difficult for the average person? Nope..! I once installed a difficult floor with a tool in one hand, and my computer in the other...lol. You can find anything online these days. And I'm not talking just text, but full blown, easy to read, directions. REO properties are a HUGE goldmine if you walk into them with the correct attitude. The video on the left is the perfect example. Someone could buy this home ($65k), gut it, put in a new kitchen, flooring, paint, some minor plumbing, minor electrical ($20-$30k) and have a $125,000.00 home. Oh, AND IT'S THE WAY YOU WANT IT.. Find that in a move in ready home... Move in time? Nice try...lol. If I said 60 days, it would be 90. The trick is to be focused. It's happened to me. I've start out thinking only a few items need fixing, and before I understood what was going on, my 4 item list now takes two pages...lol. If you're buying the home as a investment, and plan on renting it, every improvement should be looked at as a potentcial money maker. If you put granite in the kitchen, will you get more rent per month? Knock out the shower enclosure and put in tile... More money upon resale? Don't renovate based on what YOU like, but rather on what you're return will be. I, personally feel that if I renovate to a standard I would live in, I'll get my money back (and then some). Others feel VERY different. Oh, back to the home above. If you put a $25k pool in the backyard, you're still in the black. By the way, have someone else do this for ya..lol Making a smart REO purchase takes a TON of research. Numbers NEED to be crunched, BEFORE you get too excited. You also need to have a grounded perception of what you're willing to handle yourself, and what's going to be completed by outside help. When I say, “Get the first REO under your belt, and the next one will be a snap!”, I mean it. |
Homes between $40k-$55k..? Really?
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Homes between $40,000 and $50,000.. Really..? I'll admit it...lol. Sometimes it's fun to get on the computer, type in a few crazy search parameters, just to see what pops up. "Gee, I wonder if there are any condos, in the this area of town, for under $15,000..? If so, what do they look like..??" One of the many perks of being a licensed realtor. Besides, this is great knowledge, since you never know what your next client might call about. This morning I got to thinking about cheap detached homes. I'm pretty up to date with the affordable condo inventory, but what about something with an actual yard? I was shocked by the results. Many of the 33 homes I found were located kind of where I expected, in older sections of town. But there were a few.... Keep in mind, this wasn't for the entire Phoenix valley. That search returned just under 200, but that's another story. I wanted to stick to homes in my neck of the woods. As I looked through the listings, a few newer homes jumped out at me. Yes, they were a bit outside the "normal" drive times, but if you own a Prius (yes, I own the greatest car on Earth..lol), who cares about the drive..? Granted, you're sending a bit more time in the car each way to work, but for some of us, we have more time than money...lol. All of these homes needed a bit of work. Those closer to town, more than the ones further out. Location, location, location right...lol. Even with this being said, with $20,000 you can do a TON of work to any home, and transform it into something even the neighbors won't recognize... Start figuring out how to be handy, if you're not...lol. If you want to own a home, then it's time to pull the trigger. Oh, one more thing... If you have good credit, get a loan for $55,000, and stretch it out over 30 years, your payments UNDER $400.00 a month... Hmm, looking better huh...lol. |
New Buyer?
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Thinking About Buying? SMART..!Everyday I hear radio & tv comercials about how low the interest rates are on home loans. The simple fact is; if you have great credit, an even better job, and enough time in the job to show stability, you can get a loan. In 2006 all you needed was a phone. Today, it's a bit more challenging, but NOT impossible..!
FIRST - While I know it might sound like a salesman ploy, you REALLY need to talk to a mortgage broker. It's a waste of EVERYONE's time to look for homes between $200-$250k only to find you only qualify for a home below $180k. It's works the other way too... You might find that you qualify for more than you thought, which equals more home. One of the most over looked investments in this market are CONDOS. If you're new to the market, and RENTING, why not take a look? There are a TON of great condos out there, and they're selling for under $40k. Yes, you'll need to put somewhere between $10-$15k into them (they're going to be stuck in the 80's), but once you do, you'll have a monthly payment around $400.00, and you'll OWN. Why don't you hear more about condos? Because a comission on $40k isn't anything to write home about... Oh, and when it does become time for that dream home, you can even RENT your condo for some additonal cash flow. Give a call, and we can talk more about your options. |
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