Basic Data vs MARKETING in MLS – There IS a Difference

Basic Data vs MARKETING in MLS – There IS a Difference

Basic Data vs MARKETING in MLS – There IS a Difference

People say it all the time when they're considering putting their home on the market and trying to decide whether or not to hire and agent, and if they're going to hire one, WHICH one will they hire.  Among the many things people generally understand about agents is that most of them will "put the home in the MLS".  While that may be essentially true, what often gets lost in the comparison is the differences in HOW a home might be represented in the Multiple Listing Service (MLS).

Let me give you an example.  Some time ago I was hired to market a property that had been listed without success by two prior agents.  Despite a very "balanced marketplace", the home had been on the market for 9 months with no offers.  When I took the listing, my research told me there was absolutely NOTHING WRONG WITH THE PRICE!  I recommended that we not change the price at all.  However, I did dramatically change how the home appeared in the MLS.  Here are a few particulars of how the home had initially been represented:

  • Master Bedroom 1st Floor 11' by 10' No walk-in closet
  • Master Bath None
  • Bedroom #2 1st Floor 10' by 10'
  • Bedroom #3 2nd Floor 12' by 10'
  • Recreation Room 2nd Floor 16' by 12'

The home was a Cape Cod with bedrooms on both levels.  When I placed the home in our MLS, among some of the other changes I made, I included:

  • Master Bedroom 2nd Floor 16' by 12' Walk-in Closet
  • Master Bath YES
  • Bedroom #2 2nd Floor 12' by 10'
  • Bedroom #3 1st Floor 11' by 10'
  • Bedroom #4 1st Floor 10' by 10'

Having made no change in price, but changing how the home was "represented" in the MLS, in less than 10 days we had 4 offers, the LOWEST of which was full price. The seller accepted the lowest offer since it was cash and the buyer could close in 2 weeks time!  In other words, the issue that prevented the property from getting offers previously was NOT that the seller had overpriced the property, but rather that neither of the previous agents gave any thought to using the MLS to MARKET the home...they simply did data entry!

And we all know that buyers are visual!  That's what it's so important that properties be well-represented by the photos we offer.  The following are sad examples of some sellers homes are being represented in the MLS.  These are actual MLS photos that various agents thought were "acceptable" for the pre
sentation of their lisings.bad_house_photo1

Take a look at this first one.  I realize that sometimes it's hard to get a good angle for viewing a home, but to be taking it over the roof of a car....and then not even getting the full exterior view?  Whenever photos like this show up in the MLS, the first thought that comes to mind is does the seller know what their agent is doing?  Worse yet, does the AGENT know what the agent is doing!

bad_cluttered_kitchenThis is another one that caught my attention.  Did the seller even know photos were being taken for the MLS distribution?   How much extra effort would it have taken for the agent, even if the seller is not home, to take magnets off the refrigerator, all the pots, pans, bags of goodies, and pretty much everything else off the counter tops, refrigerator, stove, and oven?  In less than 5 minutes, the agent could have removed everything that is distracting attention from what is really important, taken their photos, and put everything back in place.  And what about the discoloration of the cabinet doors above the stove?  Chances are, 30 seconds with a bit of grease remover or cleanser in the best commercial cleaning traditions could have given those doors an easy face lift as well!

This has to be the epitome of lazy!  This photo was taken from the inside of a car (notice the rear view mirror), and doesn't even really have the house in thebad_photo_from_car picture.  There are two garages and some open field!  Yes, it was winter, and no doubt cold, and while I'll admit to having taken a few exterior photos from my car...(NEVER for MLS photos...only for my own record keeping and reminders!)...they don't include the rear view mirror, nor do they include a time or date stamp on them!

One of my pet peeves is MLS photos with date stamps.  There's nothing quite like bringing everyone's attention to the fact that a listing has been on the market for a bad_powder_room_datedVERY long time!  Take a look at this.  Not only is the toilet seat up (particularly noticeable since it's a different color than the toilet itself), but the inside of the vanity is on display as well.  And, yes, this one DOES have a date stamp on the photo!

Rooms being photographed should be, at a minimum, tidy, clean, and "de-cluttered".  No one expects the agent to clean a house before taking photos...but one WOULD expect an agent to encourage their seller to tidy up for photos.  Bad photos can often mean the difference between getting a live showing on a property or not.  And that difference can make a difference between getting an OFFER or not!

The point here is really quite simple:  it's not enough to have an agent who just "puts a home in the MLS".  Today, in many markets around the country, and certainly in the Chicago area market, a listing doesn't JUST appear in the MLS...that content is promulgated to thousands of individual agent websites and to a variety of "partner" sites as well...the most notable among them being!  Having your home WELL REPRESENTED on the MLS can have a huge benefit in the marketing of that home...or, when done poorly, can be a huge detriment!

You Never Get a 2nd Chance to Make a Great First Impression!

You Never Get a 2nd Chance to Make a Great First Impression!

You Never Get A 2nd Chance to Make a Great First Impression!

Remember your first day at school, or your first date, or your first job interview?  Someone special in your life probably quoted those words to you ... "you never get a second chance to make a great first impression!"  And those words hold true for real estate as well.  When you're preparing to put your home on the market, first impressions matter.  What's really important to remember, though, is that you need to be making A LOT of great first impressions if you want to get your home sold, and most assuredly if you want to get a decent price for it!

Buyer's Agents


Actual photo from the MLS

Yes, their impressions matter ... big time!  Buyer's agents, particularly the more experienced ones, see a whole lot of properties, and therefore have a great basis of comparison.  They become very aware of the "gems" on the market.  Their livelihood depends on it.  And agents are also very conscious of, not just price, but value!  If agents don't perceive that your property offers good "value" to their clients, they're likely to encourage those clients to pass you by.

Prospective Buyers

More and more buyers are doing their home searching on the internet.  It wasn't too long ago that a prospective seller's focus was on their "curb appeal" and the overall condition of their home.  Today, with so many buyers doing their research online, and many of them actually directing the agent as to which homes they want to see, making that great first impression online has become just as critical as that first impression when someone walks up to your front door.  As a matter of fact, NOT providing a great first impression online may well result in prospective buyers not even bothering to come to your front door.  This image is of how one property is being represented online.  What kind of impression does it give you?  Likely it's not one you'd want to give if you were selling your home!

Appraiser (assuming your buyer needs a mortgage in order to purchase your home)

When the real estate market was booming, it seemed as though sellers didn't have to worry quite as much about this one.  If a lender had a warm body to loan to, they seemed to bend over backwards to make sure that buyer got to the closing table, even to the point of being lax with the appraisers, not really holding their feet to the fire when it came to determining value.  However, with lenders tightening their belts, guidelines for appraisers have become much more restrictive.  This makes it even more critical for sellers to do everything they possibly can to help the appraiser see the seller's home in its very best light.  This is particularly critical because, even if the buyer sees the value in the home, even if the buyer's agent sees the value in it, if the appraiser doesn't, generally the buyer's loan won't get approved!

Taking the time up front, before putting your home on the market, to help your home make its very best first impression can save you weeks, even months of lingering on the market, and even earn you higher offers from prospective buyers.

TIP:  Pretend you are a prospective buyer (or better yet, solicit the help of your most "critical" friend) and go through your home, inside and out, and make a list of everything you (or your friend) noticed that you would want either corrected or adjusted for in the price if you were going to BUY the house.  Now ... correct it.  Some of those things will be very small (but they are still detractors ... buyers typically over-estimate the cost of hot water heater repair etc, and cosmetics and they downwardly adjust what they'd be willing to pay for a home they saw as "needing work")

The Lure of the Short Sale

The Lure of the Short Sale

The Lure of the Short Sale

short saleIn many markets around the country, and certainly here in the western suburbs of Chicago, properties for sale as Short Sales have become very prevalent, even among Bloomingdale, Bartlett and Carol Stream homes for sale.  Prior to 2008, we rarely, if ever, saw short sale listings.  Sadly, they are now fairly abundant.  As a matter of fact, according to our MLS (Hilton Head Island realtors data), of the 1140 attached and detached single family homes currently listed for sale, roughly 15% of the listings in Bloomingdale, Bartlett, and Carol Stream are indicated to be Short Sale listings!  And this DOES NOT INCLUDE those properties that may just be one more “price reduction” away from having to be disclosed as short sales!

“Why sadly?” you ask?  Well, there are many reasons having generally to do with things like the impact on the neighborhood, the impact on the seller’s credit, and the like.  But sadly also because of what short sales do to the perception buyers have of the marketplace in general, and of what buyers who choose to involve themselves in the short sale process are put through by the bank or banks involved.  This is truly a seduction…the “come hither” lure that short sale pricing offers prospective buyers.  But, as they say, all that glitters is not gold.  As my Dad used to say, “there ain’t no such thing as a free lunch!”  Here are just a few of the many reasons why short sales are to be considered only after exercising great caution:

  • Short sales are not “normal” transactions.  And they are not PRICED as normal transactions.  Their prices are reduced, often very significantly, as an INDUCEMENT to encourage buyers to take the RISK that the transaction may well not ever reach the closing table.
  • Short sales at this point offer buyers roughly a 50/50 chance of ever making it to the closing table here in the Chicago area market.  In the past 12 months, according to our MLS, there have been 7,420 CLOSED short sales.  Currently there are 15,131 short sales on the market, roughly 1/3 (4,884) of which are under contract awaiting approval of the seller’s bank (or banks).  During that same period, 14,543 short sale listings were terminated as unsold.  In other words, twice as many short sale listings were cancelled or expired as those that actually closed.  Point of information…some of those cancelled short sale listings may have gotten relisted and perhaps sold, or they may be among those still on the market.  However, MANY of them are now simply in the process of going into foreclosure!
  • When buyers consider two similar properties and one of them is a short sale, they tend to believe the “normal” sale property should be valued the same as the short sale.  This creates a very distorted perception of the value of property.  It’s important to remember that real estate pricing in general has two primary components:  the property itself and the motivation of the seller.  Distress, whether it’s of the property or of the seller’s financial situation, places downward pressure on pricing.
  • Due to the fact that banks have, for many years now, been encouraging people, even those who originally had significant down-payments on their homes, to use their homes as “cash stations”, borrowing from their perceived equity to buy cars, take trips, do home improvements, send their kids to college, the reality is that many homeowners, perhaps even most homeowners, have more than one mortgage or lien on their home.  In the case of short sales, that means there is likely more than one lender who must approve the short sale.  If you ever consider placing an offer on a short sale property, the very first question you should ask is “how many lenders are involved in this short sale?”  If the answer is more than one, be aware that the deck is stacked significantly against any sale reaching the closing table!
  • Because of the typical time frame of the short sale transaction where it is not uncommon for the transaction to take from 90 to 180 days to get from contract to closing table, if the buyer needs to secure a loan to purchase the property, they are unable to lock in their mortgage rate until the seller’s lender/lenders approve the sale, making it much more difficult to know how much their eventual monthly payment will be.
  • Because of the uncertainly of timing, buyers who are pressed to make a move by a certain date, and who are not prepared to make a double-move, are not good candidates for short sales.
  • It’s not uncommon for buyers to miss out on really great buys that are “non-distressed” properties while waiting for that short sale to get approved by a seller’s lender/lenders.

Certainly there are other pitfalls to be wary of when considering making an offer on a short sale.  Take a look at our short sale info for buyers and short sale info for sellers here on this site.  Buyers who choose to venture into that arena should do so only with eyes wide open.  The better informed they are, the more facts they have in their arsenal, the better armed they will be to NOT be among those who come up short in the end!

In a Buyers Market How Much of a Discount Should I Get?

In a Buyers Market How Much of a Discount Should I Get?

In a Buyers Market How Much of a Discount Should I Get?

It's human nature, I guess.  In many parts of the country stories abound about the great deals buyers are getting, so when it's your turn to find a home, you expect to get a deal, too, right?  There's no doubt that qualified buyers are gold right now, which, of course, gives them leverage when they're shopping for a home...and they know it!

Let me ask you a question, though:  How do you define "deal"?  When you go to the department store and find an outfit you's on a rack with a big sign over it saying "20% Off", does it make you feel good?  What if you found out that the price of that outfit had been raised by 25% the previous week.  Now how good does that "20% off" feel?

When buyers are looking for houses, of course they begin by looking at a variety of homes in their price range to get an idea of how much their dollar will get them.  But the same thing happens over and over:  when the buyer finds a home they've fallen in love with, they want a "deal".  Frankly, this market is offering up some really nice homes at great prices (even many that are not short sales or foreclosures) so it's likely buyers are finding good deals by default.  The notion persists, though, that "deal" translates into "discount off asking price".  Frankly, that notion is very flawed.

Take a look at this scenario, for example. single_story_house2

Seller "A" has a home to sell, and let's assume it has a current market value of $100,000.  It's a cute little 3 bedroom single story home in nice shape and the seller has decided to put his home on the market at $95,000 in hopes of getting it sold soon.  Seller "A" has decided on a strategy to price his property "below market value" in an effort to secure a quick sale by a ready buyer.

There is no question in real estate that motivation is critical!  The more motivated a seller is, the greater the advantage is for the buyer.  

Seller "B" has a virtually identical home to sell...also a cute little 3 bedroom home in nice shape with a current market value of single_story_house$100,000.  This seller, who figures he has "time on his side" and wants to have "room to negotiate" decides to put his home on the market for $115,000.

Buyers are out looking at properties, and Buyer "A" loves the pricing that Seller "A" is offering, and after some negotiations winds up agreeing to asking price...he's agreed to pay $95,000 for that house.  Shortly thereafter, Buyer "B" comes along and places an offer on Seller "B"s house.  After considerable negotiations, Buyer "B" agrees to pay $102,000...more than 11% discount off asking price!

Let me ask you a simple question:  Which buyer got the best "deal"...the buyer who paid ASKING PRICE for his home, or the buyer who got more than an 11% DISCOUNT off the asking price?

The bottom line here is that the amount of the discount off an asking price (if there even is any discount) is irrelevant!   It may sound better when you talk to your friends and can say "I got the seller down 11%" or "I got him down $10,000", or whatever.  But is that what really matters?  What constitutes a "deal" is how much below an item's value you paid, not how much below it's asking price!

What makes a deal a deal is not the amount a buyer is able to get the seller to discount from their asking price.  What makes it a deal is how the "market value" of a home compares to what a buyer actually pays.  Paying the full price of $95,000 for a home valued at $100,000 sounds like a deal to me!  Tell me what you think?  Have you negotiated a purchase or sale recently?  I'd love to hear your thoughts!!!

I Know You Want to Sell Your Home, BUT……

I Know You Want to Sell Your Home, BUT……

I Know You Want to Sell Your Home, BUT……

It used to be so easy (well, easy might not really be the right word, but at the very least it used to make a lot more sense!!  If you owned a home and decided to upgrade, or downsize, or relocate, or whatever you planned to do after selling, the process, though not really simple, was generally pretty manageable.  You'd do so basic due diligence to find out the current market value of your home, decide how you preferred to handle the sale, perhaps interviewed one or more agents, did a basic overview of the market for the type of home you'd like to move TO and make sure you were financially qualified...and then you'd just DO IT!

In today's somewhat precarious real estate market, though, what used to be considered "due diligence" falls substantially short of the level of research necessary before taking that leap of faith.  In many areas around the country, and certainly here in the Chicago area suburbs, values of properties have dropped, in some cases substantially (though perhaps not quite as substantially as some buyers seem to think!).  Today, it's simply more important than ever to really understand the market as it pertains to your own situation because there's the very real possibility that the local market might not necessarily bear what you believe your home to be worth.

So, that being said, what steps are important to take before putting your home on the market? housing_market

  • First and foremost, be very clear on exactly what you currently owe on your home.  That doesn't mean just your "first mortgage".  What are all the liens on your home?  That includes first and second (or more) mortgages, home equity loan/s, home equity line/s of credit, any outstanding judgments and absolutely anything else that translates a debt for which your home was used as collateral
  • Have a thorough CMA (Comparative Market Analysis) prepared on your home by a qualified, experienced Realtor you trust.  They should provide you with extensive details on comparable properties to yours including their original prices, their asking prices when sold, their final sales price, how long they were on the market, what adjustments would be appropriate reflecting the differences between their home and yours.  If there are any available, they should also provide you with interior photos of those properties and any details regarding room sizes and locations, property included, etc.  In addition, the agent should provide you with comparable listings of homes that are currently on the market (which would, if you listed your home, be your competition), as well as those that have gone off the market unsold, including as much details and as many photos as possible.  You need as clear an idea as possible of the marketplace in your area.
  • In examining your competition and recent sales, determine whether those properties were "normal" sales, foreclosures, pre-foreclosures, or short sales.  It used to be that, if your property would be a normal sale and there was a foreclosure in your neighborhood or nearby market, the foreclosure would simply be "acknowledged" in your CMA, but no real weight would have been put on its pricing because it was a "distressed" sale and not really representative of the market as a whole.  However, in many areas and price ranges, those "distressed" properties (or owners) now represent a significant portion of the marketplace.  In other words, distressed properties may well not be exceptions to the market...they may actually BE the current market.  Even if your home is not a distressed sale, when all or most of your competition IS, you must price your home accordingly if you realistically expect to get it sold.

Here is where consumer understanding of the real estate industry and the realities of how things work can get a bit sticky.  While "professional standards" requires that agents perform always in the best interests of their "clients", remember that an agent preparing and presenting a CMA is not your "agent" when doing so unless you have already firmly established that they are...preferably in writing.  Why do I make that point?  Think of this way.  In real estate terms, preparing and presenting a CMA is generally a form of "job application".  That entire process is what agents use to get their foot in the door, to get to know you and your priories, to let you get to know them and how they work.  In many cases, perhaps even most, consumers make their decision as to which agent to eventually hire based, not necessarily on who they believe to be the most diligent or professional, but on who gave them the best "price" for their home.  Many agents, as a result, are often "overly optimistic" about the market, presenting a potential seller with a less than realistic impression of the market in the hopes of securing a listing agreement with them.  Remember, generally, agents receive no compensation unless and until they have a closed transaction.  Most agents are not paid for those hours of work in preparing and presenting that CMA for you.  That being the case, it's human nature for them to want you to want to sell...and, better yet, to want to sell and hire them as your agent.  This presents a bit of a catch 22:  If the picture an agent paints of the current market is too distasteful, a prospective seller may decide not to move at which case the agent has invested all that time, effort, and expertise for which they've received, in most cases, not one penny; however, if the picture is too optimistic, the seller may have very unrealistic expectations and may be make additional plans than can either cost them financially or emotionally, or both, and the agent, if they have secured the "listing" in the process, now has a client who is likely destined for frustration and disappointment. 

One other option might be to hire a fee appraiser, but it's important to remember that appraisers do something entirely different than what a Realtor does.  In basic terms, an appraiser interprets historical information...what recent comparable properties have sold for in the past, and apply that information to determine what they believe is the "current" value of a property.  A Realtor's task is to combine historical information and current information (the properties currently for sale and those currently under contract, but not yet closed) and interpret that information with a future other words, to give their clients an idea as to what price a particularly property will likely command in the current marketplace. 

OK, let's assume that you've utilized the services of one or more professional Real Estate agents and gotten a fairly clear picture of the current market.  Here are some additional steps you might want to take:

  • This step is CRITICAL:  Using the data from the CMA's you've had prepared, have the agent provide you with an Estimate of Net Proceeds (commonly known as a Net Sheet) which estimates how much you would likely walk away from the closing table with if you were to sell your home.  This begins with an estimated selling price, and deducts all of your likely expenses, including, but not limited to, title charges, prorated real estate taxes (remember, if you're an Illinois seller, taxes are paid in arrears so at closing you'll need to come up with the difference between the amount your lender, if you've been escrowing taxes, has in your tax escrow account and the amount required to bring your up through the date of closing), recording fees, escrow fees, tax certification, release of lien fee(s), brokerage fee, attorney's fee, survey, flood certification, interest proration through the day of closing, etc. 
  • Determine, based on your likely selling price and the estimate of expenses you'll incur (don't forget to estimate moving expenses as well), whether you are in a financial position to sell at this time...will you likely be able to leave the closing table with money available, or, if you were to sell now, would you need to consider doing so as a short sale?
  • Assuming you will have funds available after closing, combine those funds with other monies you currently have available and decide how much of that you would want to apply toward a downpayment on a future property (if your decision to move also includes the purchase of a new property).  With that information in had, get one or more lender "preapprovals".  Your Realtor can most likely recommend a few excellent loan officers who can give you a pretty clear idea as to how much of a mortgage you "qualify" for, and under what specific terms.  Please note that in the recent past, lender underwriting guidelines have changed considerably, so it's important that you stay current as to how those changes might impact your qualifications to purchase, provided you need a mortgage to do so.  Based on a lender preapproval, coupled with your available down-payment, you now have an idea of your maximum purchasing price range
  • Armed with your financial qualifications, determine the specifics of where you'd want to go if you did in fact sell your home.  Think about things like price range (now that you know your "maximum" price range, determine how much you are actually "comfortable" spending each month.  I routinely get two numbers from my buyer clients...the amount they are pre-approved to buy, and the amount they are comfortable spending.  Our search always begins with their "comfort" number), communities you'd like to live in, type of home (is it attached or detached housing), what style of home are you interested in, how many bedrooms and baths do you need, what about a basement, or lot size, etc. 
  • Create for yourself two lists:  the first is your "must haves", the other is your "wish list".  Your initial focus should be on your "must haves". 
  • Have your agent, if your market place has it available, set up your "must have" search parameters in their local MLS (Multiple Listing Service) system so you can receive copies of listings meeting your criteria.  Review those listings online, and choose a few that you feel are the closest match to what you would like to buy.  Remember, at this point you are simply trying to get a feel for whether or not the type of home you would want to move to if you sold your current home is readily available in the price range you are qualified and prepared to spend.  You are not really looking to "find" that specific home at this point, unless you are in a position to purchase that next home without having to sell your current home.
  • Schedule an appointment with your agent to actually go out and visit several homes in person. 

Once all that is done, you'll find you're in a better position to determine whether you really want to (or are able to) sell your home.  The more preparation you do prior to making a decision to move, the better position you will be in to make that move with confidence.

When Expectations and Market Reality Collide

When Expectations and Market Reality Collide

When Expectations and Market Reality Collide

To a certain extent, it's always been true ... a buyer's perception of value is generally quite different than a sellers.  But in this market, buyers are more bewildered than ever when they begin their home search.  They're wondering why THEY can't find those fabulous $400,000 homes for $200,000 or less!  And while the reality is that there such extreme values may appear now and then, the majority of what's on the market today, while substantially discounted over what they might have sold for just a few years ago, are generally not nearly that extreme.

There's a reason why parents have reminded their offspring "if it sounds too good to be true, it probably is!" for generations.  The reality is, despite the decline in home values that plagues so many communities today, buyers are often very disappointed when they first begin actually looking at homes and compare what they're seeing in their price range to what they thought they would find.  Just this weekend, I was showing homes to some very enthusiastic first-time buyers who had scoured through the hundreds of available MLS listings that met their criteria.  They'd found several that looked appealing in photos and were very excited to get out to see them in person.  This would be their first time actually getting inside homes currently for sale, and the plan was for this to be (unless we found something really SPECTACULAR) basically an "educational" appointment to get an idea of just what the dollars they had planned to spend would bring them in the areas they had chosen.  What they found, and what many other buyers are finding, is that there is often a disconnect between the perception of the current market and the reality.mansion

Having realistic expectations is a critical component for a productive home search experience. Imagine that, based on stories you'd heard and the news reporting, that you BELIEVED the dollars you had available to spend could buy you a home like the grand home you see here on the left.  And imagine that when you actually got out and began looking at homes in your price range, what you found were more like the one on the right?  It's a nice home...nicely manicured lot.  And let's even assume that what you saw inside the home was wonderful...well cared for, updated, spacious.  But how would you feel?  Would you be excited about the one on the right if your expectation was that you could buy the one on the left for the dollars you'd planned on spending???? moderate_house

Chances are you'd be very disappointed!  Regardless of whether or not the house on the right was a great home, in a great neighborhood, in great condition, and representing a great value, the reality for you would be that you would feel as though you were getting robbed!

rundown_houseBut now let's assume your perspective was different.  This time imagine your expectations were reversed and that what you BELIEVE you'll be able to find in your price range looks more like this!  With that in mind, now go back to the middle image and think about how you might feel about THAT home?  Would you more likely feel disappointed...or pleasantly surprised?

The reality is that the middle house never changed.  It had the very same things to offer whether you expected to find more house for your dollar or less!  But, based on those expectations, your perception of its value most certainly DID change, right?

So how DO buyers better prepare themselves for the realities of the marketplace?  Here are some things you'll want to consider if you're thinking about buying a home and don't want to set yourself up with unrealistic expectations:

  • Recognize that the media (online as well as off) does hype and exaggerate.  It's how they get the viewer's attention.  Accurately representing reality is often not their priority.
  • When someone says they just got a house for $200,000 that the seller had purchased just a few years earlier for twice that, recognize that there are many factors that could be at play to create the difference in's not always just a shift in the market.  For example, are the home and property in the identical condition they were in when they were purchased earlier for that substantially higher amount?  Condition matters!
  • When you hear that someone was able to negotiate an outrageous discount from the asking price, try to find out how "realistically" the house was priced in the first place.  For example, if you have two identical houses that are valued at, for example, $110,000, one priced at $100,000 and the other at $130,000, might you be able to get a bigger discount off the one priced at $130,000?  Undoubtedly.  But which would really represent the better deal?  How much someone is able to negotiate off an asking price is irrelevant without knowing the other pertinent factors.

What are your expectations of the market?
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Is Your Agent REALLY Working for YOU?

Is Your Agent REALLY Working for YOU?

Is Your Agent REALLY Working for YOU?

An interesting email arrived recently from my profile on one of the online services I use.  It was fairly anonymous simply saying that a prospect wanted me to email them about selling their home as quickly as possible.  It gave no information other than that, but since consumers tend to want their anonymity, I decided to respond courteously and offered to assist.

The prospect replied me very quickly, but only said "I have a contract with remax but they have not shown the house.  I thought that you might have a buyer.".

Interesting.  There was no mention as to the COUNTRY, let alone city or area where the house was, price range, type of home....absolutely nothing.  After all, these online venues are global.  Again, though, it did occur to me that people often do make assumptions, and not knowing what the writer had BELIEVED she had furnished me when she submitted the online form (sometimes it's easy to think the website itself is supplying a certain amount of "content" to the person you're writing it's best not to be too quick to judge), again I responded.  In that response, though, was information that you, too, might find helpful.  One thing is true of real estate (as it is of nearly any other industry) people simply don't know what they don't know.

So, here begins our discussion in response to her request

When you say "they" have not shown the house, I don't know who you mean.  When I list a home for sale, I make sure the owner understands that the listing agent's job isforsale4_md_clr not to SHOW their's to aggressively market the home to expose it to agents (whatever company they represent) and qualified buyers (whether already working with an agent or not).  I NEVER commit to personally showing their home (though I often do because of inquiries from signage, from my various websites, from my online "presence" on places like Yahoo, ActiveRain,  Zillow, Google, Craigslist, Twitter, Trulia, Facebook, LinkedIn,, to name just a few).  I invest a great deal of time and resources in getting "found" online...which obviously means the homes I market are getting found as well.
Something else I think it's important for today's sellers to understand.  Yes, the real estate market is down in our area, but houses ARE selling.  But surprisingly SHOWINGS are down from what they had historically been.  The reason is hasn't been all that long ago that when a buyer wanted to see a home they had to schedule an appointment with an agent to show it to them...because that was the ONLY way to see the inside.  Today, with the preponderance of photos online (in our MLS, we're allowed to have up to 15 photos including the exterior front, and we can also have virtual tours...the one I personally use permits up to 50 images whether stills or panoramas) many buyers are viewing the homes that interest them online, rather than making appointments to see them.  And they're not just getting the photos...they're seeing the locations, they're getting demographics, they're getting school information, etc.  The bad news is that not as many people are trapsing through your home.  The GOOD news is NOT AS MANY PEOPLE ARE TRAPSING THROUGH YOUR HOME.  On the other hand, THOSE THAT DO SEE IT IN PERSON ARE MOST LIKELY MORE SERIOUS BUYERS!  They've generally already seen your home online and LIKED IT enough to want to see it in person! 
My suggestion would be to speak with your agent...find out what they're doing to MARKET your home, to EXPOSE it to the real estate community and to potential buyers.  The fact that they personally are not showing it is of little consequence in my opinion.  Now, if they are also not aggessively MARKETING it for you...that's a different matter.
As to whether I personally might have a buyer...since I know nothing about your property, there would be no way for me to tell.  If your home is listed, feel free to give me your address or MLS number.  I'll take a look...and if it appears to be something that might fit the needs of any of my buyers, I'll certainly bring it to their attention.

Please understand, my intent, once the consumer indicated her home was listed, was not to interfere with her listing agreement with her broker.  That's a clear violation of our Realtor code of ethics.  However, I also realize that some agents simply don't take the time to explain things to consumers (at this point, I had no idea who the agent was, let alone how thoroughly things were explained to the seller), and, just as important, sometimes consumers are bullheaded and simply don't want to listen to the very people they are entrusting with one of the largest transactions of their life!  That I've simply never understood!

At any rate, another response followed giving me some basic information about the property, including an MLS number.  Curious, I looked up the listing.  It had decent (not great) photos, and a virtual tour (sort of), but of course I don't know what other (if any) exposure it was getting.  However, it had only been on the market 3 weeks, already had one price reduction, but what interested me most....NO KEYBOX.  In our market that's considered a no-no, so I did follow up with one more response...

Took a look at your listing.  I noted that you have no keybox.  Frankly, you're shooting yourself in the foot by making it more difficult for agents to show.  Right now [city name] has 20 single family 4 bedroom homes under $400k, only 3 of which have contracts on them.  If an agent has a lot of homes to show a buyer (and they're generally looking in more than just one town) and limited time in which to show, one way they make their decision is by how difficult it is to show a property (unless they have a VERY high level of confidence that that particular house will be perfect for their buyer, the more difficult to show, the more likely it will be eliminated).  If you want your home shown, make it as easy as possible to do so.  By the way "mls listed" is bare minimum...find out what ELSE is being done to market your home.

Getting a home sold is a partnership!  It takes a collaborative effort between a seller and their broker, each with the same goal in mind!  It also requires active communication!  As far as anyone can tell, this seller's agent might well be doing everything they can to market this seller's property ... but if the seller doesn't know that, it's easy to believe that "nothing" is being done.  My suggestion ... if you're a seller and your agent is not communicating with you, pick up the phone!  If they don't respond, contact the managing broker.  Particularly in this market, you should expect nothing less!

But That Was What WE Offered Them

But That Was What WE Offered Them

But That Was What WE Offered Them

Have you ever had this experience, or know someone else who has?  Here's the situation:

Buyer has been searching for homes and finally decides on one that meets his needs.  He makes an offer, negotiates in good faith, but the seller decides not to accept it.  Then weeks go by...maybe even months.  Eventually the house sells, and when that original buyer investigates, he discovers that the seller sold his home for what the buyer had offered months earlier.  What happened?

Actually, this is not such an uncommon situation and for a whole host of reasons...none of which being nefarious.  Take a look at SOME of the reasons why a seller might eventually accept a previously rejected offer:

  • First and foremost, price is not the only component of an offer, though to hear buyers and sellers alike talking about their purchase or sale one might reasonably think it is.  There are many things to consider when creating a contract, things like time frame of closing, how well qualified the buyer is (which, from the seller's perspective, translates into how likely it is that the transaction will make it to the closing table), what type of financing they buyer chooses (which, in some circumstances, can translate into higher costs and/or higher risk for the seller), what additional "concessions" the buyer is requesting (which impacts the seller's bottom line), among other things.  A change in any of a number of the "terms" of a contract can make the difference between one that is acceptable to the seller and one that is not.  Case in point:  if you were a seller who absolutely must close you home as soon as possible and you had two identical offers, both with closing dates within your desired time frame, but one required financing while the other was a cash certain offer, which would you pick?

  • There is nothing "static" about the real estate is constantly changing.  Availability of housing changes; availability of buyers changes; availability of affordable financing changes; number of competing properties changes.  A seller who feels he has little "competition", thereby deeming his property more "valuable", is far less negotiable than he is when new inventory comes on the market and more competitive pricing.  Timing is everything!
  • There is also nothing "static" about life!  A seller who believes has 12 months to sell his home, who professes he's "in no hurry", is far less negotiable when that is his situation.  However, because situation changes, if he suddenly discovers he's about to lose his job, or his wife has become pregnant again and he now "needs" a bigger house, might find a previously "unacceptable" offer perfectly reasonable now.  Circumstances change, and when they do, so does motivation.  Motivation matters!
  • And personality matters as well!  More than one home has sold, or not, because of the personalities and temperaments of the people involved.  The seller who "loves" their home, has put their sweat and tears into their home, has filled that home with memories both wonderful and not, might easily reject an offer they deem "insulting".  A buyer never really knows what that home (which is basically "brick and mortar" to them) really means to the seller for whom that home means a whole lot more, and how difficult it might be for that seller to let go...even if they really must.  Two buyers with identical offers might have extremely different results with their offers, simply because one shows the seller greater respect for that connection during the process of negotiation.  I've even seen sellers take less from one buyer vs another because they "really liked the one buyer and wanted them to have their home".

Of course price matters, to both the seller and the buyer.  But it's important to remember that price is not the only thing that's important when negotiating a contract.  This is one place where the cliche really is's often the little things that make the big difference!

The Modern Day “Here’s Lookin’ at YOU, Kid”

The Modern Day “Here’s Lookin’ at YOU, Kid”

The Modern Day “Here’s Lookin’ at YOU, Kid”

While driving to an appointment this afternoon, I heard an interesting interview on the radio that really got me thinking.  Like many people, maybe like YOU, I tinker with social media. I have a Facebook account and a Linked-in account, and I have a Twitter account as well.   But what caught my attention, however, is how easily we can put ourselves at risk without ever realizing it.  So I thought there were tips on that radio interview well worth passing along...we all want to be social...but let's be SMART about it too!

TIP #1

You don't always have control over who is reading the things you write.  As I recall, some months ago subscribers to one of the major social networks (as I recall, it was Facebook) discovered that their "privileges" had been compromised and some information they had deemed "private" had become, at least for a period of time, public domain.  To protect yourself, DO NOT put anything on a social networking site that you don't ever want to be made public.

TIP #2social_networking

NEVER disclose really confidential your actual date of birth (including year) or your social security number.  Best also to avoid using things like your mother's maiden name.

TIP #3

Avoid using readily accessible information for your passwords.  For example, many people will use a pet's name or their own nickname or their birthday as their passwords.  Those are all BIG NO-NOS.


Be creative in designing your passwords.  For example, select combinations of letters, numbers, symbols, and upper/lower case that are easy for you to remember, but very difficult for someone else to figure out.  You might try a simple phrase that has meaning to you, like "I always wanted to be 7' tall"... to create "Iaw2b7't".  It includes Upper case, Lower case, Numbers, and a symbol...making it much more difficult a code to break.

TIP #4

While some of the visitors to your page are surely your friends, remember that social networks are a great source of "evidence" for officials trying to uncover wrong-doing.  For example, best not to brag that you just went on a great cruise with the money you won at a poker game.  That's the sort of thing you might NOT want certain eyes to see.

TIP #5

While it's great fun to keep the chatter going and occasionally to "vent"...what you put online can easily take on a life of its own!  Words have consequences....choose carefully.  Have you ever SAID something to someone else and then later thought "gee, I wish I hadn't said that" or "I should have chosen my words more carefully" or "but that's not REALLY what I meant"?  Well, "saying" in online has a MUCH LARGER audience.  That makes it much more difficult to "take back" something said in anger, or haste, or without putting in context.

I've often heard it said that email is such a flat facial expressions, no voice inflections, no body language to help put "words" into proper context. And emails are generally exchanged with only a few people at a time.  But in social networking, what you say (even if it is MISUNDERSTOOD, taken out of context, or whatever) can go viral in minutes!

Here's an example I love to make the point.  Take a simple question...EXACTLY the same words...but with different emphasis, and look how DIFFERENT each version of that sentence is interpreted:

  • Are YOU still beating your wife?  (Or is someone else beating her?)
  • Are you STILL beating your wife?  (Or have you stopped?)
  • Are you still BEATING your wife?  (Or are you now doing something else to her?)
  • Are you still beating YOUR wife?  (Or have you moved on to beating someone else's wife?)
  • Are you still beating your WIFE?  (Or are you now beating your kids or your mom instead?)

I love what the English language can do!!!  I hate, though, when I get tripped up and somehow phrase something in a way that's easy to misunderstand!  Hope you have better luck in that department than I do!

What do YOU think?  Do you have any more Tips for Social Networking???  Bring 'em on!

Your FICO Scores…Experian, Equifax and Transunion Sell them to Lenders….but Sell a FAKE to You!

Your FICO Scores…Experian, Equifax and Transunion Sell them to Lenders….but Sell a FAKE to You!

Your FICO Scores…Experian, Equifax and Transunion Sell them to Lenders….but Sell a FAKE to You!

If someone said the temperature is 38 degrees outside, how would you want to dress?  Would you be grabbing an overcoat?  How about ear muffs?  Would you begin to shiver just thinking about it being so close to freezing outside? 

Now, what IF that 38 degrees they were talking about was the Celsius number???  According to the National Weather Service, a 38 degree Celsius is equal to 100.4 degrees Fehrenheit! 

When discussing temperature, it MATTERS which scale is being used.

When discussing CREDIT SCORE, it MATTERS which scoring scale is being used!!!!

For years it was so easy.  You could visit any of the major Credit Bureau websites (Transunion, Equifax, Experian) or any of their "partner" sites and pull your own credit.  For a small fee you could also get your FICO score.  After all, knowing your own FICO gave you a barometer as to how lenders would look at you.  It let you know whether you would likely be able to get the best interest rates on your purchases or loans, or whether you'd likely have to pay a higher interest rate because your credit score was lower than desirable.  The FICO ranges between 300-850 and it is FICO that the majority of lenders still use in making lending decisions (though there are even different "versions" of legitimate FICO which can yield somewhat differing results).  

The very fact that it is FICO that the majority of lenders use is the reason why consumers have made it a habit of monitoring their own credit scores ... so they can have an idea as to where they stand in the "credit worthiness" spectrum.

But the three major credit reporting agencies (Experian, Equifax, and Transunion) have made it a whole lot harder for Consumers to REALLY know where they stand with regard to their TRUE CREDIT SCORE....THE FICO!!!  What's even worse, MOST CONSUMERS DON'T EVEN KNOW THEY'RE NOT GETTING THEIR FICO SCORE WHEN THEY REQUEST THEIR "CREDIT SCORE" directly from any of those primary credit reporting agency websites (let alone from any of their "partner" sites!).

Here are some of the facts:

  • FICO measures your credit on a scale of 300-850
  • The "Credit Scores" being offered by the major credit reporting agencies is based on a scale of 501-990 and is called a VANTAGE score...TOTALLY UNRELATED TO FICO!!!!
  • FICO is the score that lenders, employers, insurers, landlords, etc., require when making decisions on whether or not (or at what interest rate) you're "credit worthy"
  • FICO is the scoring system that, until recently, the major credit reporting agencies (Experian, Transunion, and Equifax) made available to the consumer directly from their own websites.  THIS IS NO LONGER THE CASE.
  • When you are offered "opportunities" to check your "credit score" online, these companies are NOT giving you THE credit scores that they are providing to anyone inquiring as to your credit....

In other words...they are telling YOU one thing....and telling potential creditors SOMETHING TOTALLY DIFFERENT!

For more information on what's happened to your FICO, including links to some great resources on the subject of FICO and your credit, visit my "Know Your REAL FICO" page for more information!

Have you checked your credit yet?  Do you know what your FICO score is (NOT just your "credit score" sure it actually says FICO (and you can see your FICO scores for Transunion and Equifax at it doesn't, you're seeing a FAKE!