Posted by Annalisa Burgos | June 16, 2009
Despite its name, a short sale is by no means a “short” process. But unlike what you may have heard, getting a short sale approved by your lender is not as hard as you may think — if your real estate agent knows what they’re doing.
In order to orchestrate a successful short sale, you need a master negotiator, says Troy Huerta, short sale division leader at Coldwell Banker Residential Brokerage in San Diego. “Many agents forgot how to negotiate. There was no negotiating in the past. You would list a home at a ridiculous price and someone would pay it.”
Those days are long gone. Home values are falling. Unemployment is at 9.4 percent. And according to RealtyTrac, there were more than 321,000 foreclosure filings in May, 18 percent higher than a year earlier. That’s expected to get worse.
But there’s a way to help ease this flood of foreclosures, Huerta says. Do more short sales.
In the past, lenders have been reluctant to do short sales. And why would they? They stand to lose a LOT of money. But the reality today is that if a lender doesn’t do a short sale, it may get stuck with a property that is harder to sell or will sell for less than it could have gotten. (A buyer is more willing to buy a short sale in good condition than a bank-owned foreclosure that needs a lot of work.) Not to mention the cost of pursuing the foreclosure process.
Even Fannie Mae felt short sales could help reduce foreclosures. It launched a pilot program pre-approving short sales for homeowners in Phoenix and Orlando.
Now, lenders should be more motivated than ever to get these deals done — as part of President Obama’s economic stimulus plan, the federal government will pay lenders up to $1,000 for each completed short sale or accepted deed-in-lieu of foreclosure.
READ HUERTA’S TIPS FOR BUYING AND SELLING A SHORT SALE…
Posted by Annalisa Burgos | June 9, 2009
It’s no secret that listing agents typically charge a commission of about 4 percent to 6 percent of the home’s selling price. Most sellers will price that commission into their asking price so they can walk away from the sale with the profit they want.
So if you sell your home for $300K and you agree on a 5% commission, your agent will get a nice $15,000 paycheck and you get $285K minus your selling expenses.
I know what you’re thinking — $15,000 seems like a lot. Why not skip the commission and sell the house yourself? After all, your home is in good condition in a good neighborhood, you’re well connected with a marketing background, you have the time and patience — what’s the big deal about going FSBO?
Well, today’s real estate market is very different from the one a few years ago when homes practically sold themselves. And you can’t just plop a “for sale” sign on the lawn, post an ad on Craigslist and wait for buyers to show up. (Maybe if people are clamoring to get into your neighborhood or you price the home way below market value.)
Today, homes can take as long as 6-9 months to sell. Listing agents are paid a commission once they find you a “ready, able and willing buyer.” And in this market, that’s no easy feat. Sure buyers are everywhere, but a serious buyer who’s got financing? Kinda like finding a single guy at a movie screening of “The Proposal.”
Before you decide to take matters in your own hands, weigh the pros and cons. Do you really have the time to market your listing, show your home to buyers, coordinate inspections and close the deal? $15,000 may seem like a lot, but when you add up the value of the time and effort it takes to sell in this market, it may not be so unreasonable. Besides, commissions are negotiable, and many agents are willing to work with you to get your business. If you’re just wary of working with a real estate agent, try these tips for finding the right agent for you.
And to help you get a handle on the selling process, check out FrontDoor’s Guide to Selling a Home. You’ll get a better sense of what the process entails so you can decide whether you can take this on yourself or would rather leave it up to a professional.
Posted by Annalisa Burgos | May 29, 2009
I’ve been looking for a place to buy in Manhattan for about three months now. Today, my real estate agent tells me that during the summer, open houses shift from the weekends to weeknights. Or you have to set up an appointment to see the place during a weekday.
What?! That means I have to dash from the office to a property crosstown or wherever during my lunch hour (which I don’t normally take). What a major inconvenience.
According to rule #57 in the home seller’s handbook, sellers should make their homes as accessible as possible to attract as many buyers as possible, especially in a buyer’s market. Okay, there’s no handbook per se, but think about all the foot traffic you’ll miss out on. Don’t sellers want to sell their properties quickly? Manhattan is so weird.
In addition to inconvenient open houses, here are a few more pet peeves I’ve had during the house hunting process (and things sellers and agents should keep in mind when marketing their properties):
1) Not posting pictures of the inside of your home online. I’m one of the more than 80 percent of buyers who search for homes for sale online and if you don’t have pictures, I move on to the next listing that does have pictures. These days, your agent should be insisting you include pictures with your listing. If he/she doesn’t, ditch the agent.
2) Posting blurry pictures or ones that are so small you need a magnifying glass to see anything. That’s almost as bad as not having pictures at all, so take clear, appealing pictures. And get rid of the clutter so buyers can see the space, not your stuff.
3) Exaggerating what your home has. One listing I saw read “HUGE terrace.” Since outdoor space is something I want in my new home, I set up an appointment to see the place. To my dismay, the “HUGE terrace” was neither huge nor a terrace! It was a railing that ran along the outside of the bedroom with barely enough room to fit one person! I refused to deal with that listing agent again.
4) Not being prepared for the home tour. I’ve toured properties where the agent doing the showing had no idea what the house or building offered. It was a case of the blind leading the blind. Each time I would ask a question, the agent would give me a blank look and say “I’m not sure about that. I’ll look into it and get back to you.”
What are your biggest pet peeves with the house hunting process? Post your comments below and share your stories with us!
Posted by Annalisa Burgos | March 27, 2009
I’m about halfway through my 75-hour New York state real estate licensing course, and each class gets more and more amusing. It’s like any other classroom setting — you’ve got the students who ask random questions (“why do we need to learn about property insurance?”), students who act like they know everything (“I’m a property manager so I already knew that”), and students who just observe and take it all in (that’s me).
Literally anyone can get a real estate license. All you need is to be at least 18 years old, pay about 500 bucks for 75 hours of training, and pass a school exam and a state exam. No high school or college education required. No hundreds of thousands of dollars in tuition fees. No experience necessary. All you need is the dedication to get deals closed.
The housing boom may be over, but you can’t tell with how many people are clamoring to be real estate agents. And from talking to some of these people, many are looking to capitalize on one of the hottest buying markets in history. Obviously, this is the best time to be an industry insider.
When I lived in Knoxville, my husband and I wanted to buy a house and went house hunting several times a week. Being investors, we were often surprised to find that many of the homes on the market were owned by real estate agents. It seemed like the agents were buying properties from sellers, making superficial fixes and then putting them on the market at a higher price to make a profit, in one word — flipping.
In a recent class, the teacher said flat out, “This business is not about showing houses. It’s about investing in properties and building your wealth. That’s where the real money is.” And true enough, many of the students agreed that that’s why they’re getting their licenses – to get first dibs on bargains and position them for personal gain.
As we continued to talk about things like ethics and good business practices, I’m concerned about the ethical implications. Personally, I think there’s nothing wrong with agents who are in the biz to flip houses. Heck, if I find a bargain, I may do it as well. But where it gets murky is when an agent’s true intentions are hidden behind promises to be true consumer advocates. Like when a seller says he wants X amount for the house but the agent knows it’s worth more and buys it so he can flip it himself. Or when a buyer is looking at a house and the agent tells him it’s a great buy, though he knows it’s a flipped property. Agents who don’t make their intentions clear are at risk when the public gets wise.
The best way for consumers to protect themselves is to arm themselves with their own research and information. That way, they can tell the difference between a true agent and someone who’s just in for the flip. Ask friends and family for referrals and interview at least three agents before choosing one. Get to know the buying process with FrontDoor’s First Time Home Buyer’s Guide, which gives easy-to-follow, step-by-step information from evaluating your finances to closing escrow. We also offer tools to research homes for sale, cities and neighborhoods, recent sales prices, how much mortgage you can afford and more. It’s all incredibly empowering!
With all this information, today’s smart consumer wants a trustworthy, dedicated real estate agent. Even if an agent has his/her own investments on the side, quality customer service is still the benchmark of this profession.
Posted by Annalisa Burgos | March 26, 2009
Now that Twitter is mainstream — with politicians and former naysayers now regularly tweeting (moi, for one) — every industry is trying to figure out how to use this tool to its advantage.
The news industry, for one, is finding it very useful when reporting and finding sources, especially during breaking news events like the terrorist attacks in Mumbai.
Real estate, meanwhile, is still trying to figure it out. Most real estate professionals have a Web site (maybe with a blog) and a Facebook profile, but many will tell you that they are too busy to Twitter or don’t see the value in doing so. After all, if you Twitter four or five times a day about yourself or your brand, don’t you risk diluting your brand, or even worse, turn off people with your constant self-praise?
Yes, and that’s the problem. Companies — real estate and otherwise — shouldn’t be thinking of social media networks like Facebook, LinkedIn and Twitter as straight-up advertising and marketing vehicles, where you plaster your name and expect clients to flock to you. Most people are like me — they’re not going to scour Facebook for a Realtor. But I may tell a friend of a friend that I’m looking to buy a house, and if you (the Realtor) have a relationship with that friend, I may get referred to you.
Think of it this way — you’re at a networking event and you meet that guy who is pushing his business card in your face as soon as you say hello. No one likes that guy. On the other hand, you’re more likely to reconnect with the guy who explained the ebb and flow of mortgage rates to you.
So think broad reach and long-term — think of these social networks as bridges to a ginormous audience, bridges that never existed before, but have the huge potential of helping you build relationships. They are called “social networking” services, not “marketing” services, after all.
Millions of people are on these networks having genuine real estate conversations. Whether it’s a person complaining about the buying process or a seller trying to hawk his home that’s been on the market for 8 months, people are talking about real estate.
And some agents are generating leads by joining these conversations and sharing their expertise, without the in-your-face marketing tactics. Find out how they did it in FrontDoor’s article “Twitter Your House and Friend a Realtor on Facebook.”
Speaking of social networking, you can follow FrontDoor.com on Twitter at www.twitter.com/HGTVFrontDoor and join our fans on Facebook at www.facebook.com/pages/FrontDoorcom/18669721826.
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