Archive for the 'Real Estate Industry' Category
Reverse Offers: When She Asks Him To The Dance
categories: Listings, Real Estate Industry, Sellers, Stuff I like to talk about
Just like everyone wants to be liked, Sellers just want some buyer love. Your home gets shown, and show, and shown, you get the idea. Everybody “likes” you but who LOVES you? We can lower the price and wait some more. That’s the traditional approach, right?
Why do we feel it necessary to do what is normal. We’re in a very different market. One that acts like nothing most of us have ever seen. What used to be “normal” isn’t any longer. It’s like when we were kids, the boys ALWAYS asked the girls to the dance, right? Why didn’t the girls ever ask the boys? Maybe some did. Those girls who refused to do what was considered normal.
That’s what a reverse offer is like. I had a unique listing that received little traffic but great feedback when we had showings. After too much time on the market I decided to do something different. We had a buyer who loved the house but wanted to keep looking. I approached the Seller’s with the idea of making an offer to the buyer.
Now, here is the important part. If you do this, it must be a meaningful offer. Meaningful enough to pull the buyer off of the fence and say “Maybe I don’t need to keep looking”. At the same time, you want to deliver the offer in a way that says “We think this is meaningful and you shouldn’t see this as an opening offer to a protracted negotiation. We’re pretty much where we think we can go”.
Well it worked. We had to give up a little more than our original reverse offer price but the important thing is we motivated the buyer to make a decision. As most Realtors out there can attest, getting buyers to pull the trigger can be difficult in this market.
If we shift our thinking with the shifted market, we will survive…or better yet, thrive!
Posted by Bob Strader | Currently No Comments »
Seller Financing and House Trade Program Aim to Break Real Estate Market Impasse | The Snorkel Business
categories: Alpharetta Real Estate, Buyers, Lending, New Construction, Real Estate Industry
ALPHARETTA - Expanding on yesterday’s post about house swaps and real estate log jams, here is a slightly different angle to this problem.
Take builders. I didn’t talk about them yesterday.
They are the opposite of the first time home buyer. They don’t have anything to buy, only a lot to sell - as opposed to not having anything to sell and only dealing with a single home to buy like a FTHB.
Builders, of course, are dependent on buyers. Builder are having trouble selling though because, as much as John Q. Public might like to buy, he either can’t sell his house or he is underwater in his house, in which case he needs a snorkel - I mean he might be selling in order to downsize.
The buyer might be credit challenged; sometimes the buyer has a sizable down payment but can’t get a loan because they are self-employed, or don’t have American credit because they are from another country.
So what do builders do about the situation?
Some of them don’t do anything. These are the ones you hear about going bankrupt.
Others get more creative and agressive. They partner with a lender to do low rate or “buy down” loans where the builder pays to buy the interest rate down for a period of time. I saw today where McCar homes is partnering with SunTrust for loans at 4.5% if they close by January 31st. The purchaser must have a 680 credit score to qualify, though.
Some builders will offer to purchase the buyer’s existing home so that they can buy the builder’s new home. This strategy could help, but sometimes the builder is just trading one head ache for another.
I was involved in a deal last year where a builder offered to buy my client’s house. He was going to pay them about 20% less than what it was listed for: His calculation was that my client would ultimately net about that once he paid real estate commission, price concessions and repairs. The deal didn’t work out, but the offer was certainly there and I know similar deals have been struck.
Finally, owner financing is another option that you see builders offering these days and owner financing is closer to what I feel is really going to help break the log jam.
We have a market failure where willing sellers and willing buyers can’t transact because prices are out of whack and credit is extremely tight. However, where there is a problem, there is always a solution in a free market.
What I’m seeing now is more sellers and particularly builders offering financing. In Cherokee, Forsyth and North Fulton counties, there are currently 222 properties for sale where the seller is offering to finance. Most of the same rules apply as a typical loan except your bank is the seller. Like a bank, the seller is assuming the risk that you pay on the loan. If not, they can foreclose…just like a traditional lender.
Even more interesting, now we are starting to offer seller financing coupled with a house trade program to help buyers and builders break the market impasse. Again, where there is a will, there is a way: a free market allows for creative solutions. The lenders screwed things up, so now other parties must assume the role of a bank to unscrew us all.
If you would like to buy a new construction house, but need to sell yours first, we can help with a trade program; or we can seller finance your new purchase if getting a loan is your roadblock. We could also privately finance the sale of your home so you could get it sold in order to buy the builder’s new house.
Our current inventory is sixty homes ranging from $285,000 to the $800’s throughout north Atlanta.
Builders are anxious in this market to understate the situation. They have asked us to do anything and everything to help break the log jam and get their inventory sold. I hate the expression “thinking outside the box” because I think it is thoughtlessly over used, but I do believe some new thinking is required in this market in order to get things done.
The alternative is not pretty. Reference the builder who does nothing. We are now in the snorkel business.
Posted by Kevin Warmath | Currently 3 Comments »
New Tool from SoftRealty for Searching Alpharetta, Roswell, Milton & Johns Creek Real Estate
categories: Alpharetta Real Estate, Buyers, Real Estate Industry, Schools
The world of Real Estate Search is changing. Two years ago, I was one of the very first Realtors in Georgia to offer my website users a map-based search engine.
People flocked to it. It was cutting edge at the time - and still remains the best way to search for homes online - but it is time to introduce more and better search features.
Therefore, today, I’ve started offering my website users the option of using a new search tool from an Atlanta-based company named Soft Realty.
Click on the picture above to try a sample search or CLICK HERE to go directly to a search for Alpharetta Real Estate between $300k and $800k.
I need your feedback regarding how you like it - particularly compared to what I already have, which is pretty good, I think.
The new solution has some advantages for me, namely that it is free, as its revenue model is ad-based. (The solution is still in beta and no ads are showing yet, but would you mind if they were? It would be like Zillow or Realtor dot com, that both have ads.)
For you the advantages are more features. The current beta solution doesn’t have all the features yet, but from what I’ve seen so far, the promise of better usability and fuller features for you, the real estate searching public, is just around the corner.
As a real estate agent, I must use a third-party vendor to provide the home search feature for web clients. There are only a handful of such providers to choose from and most of them offer solutions that are woefully inadequate. These vendors are catering to the lowest common denominator, and I don’t want to be the LCD.
I don’t want you, my client, to have to settle for average when we have so many ideas to make home searching better and easier. Getting someone to implement them is the hard part; if we were allowed to do it ourselves, believe me we would.
For instance, my existing solution does not allow you to view all homes in a specified school’s attendance zone, if you can believe that. With Soft Realty, I can do this as basic functionality.
Basic Searchs for Alpharetta Homes by School Attendance Zone
For example, CLICK HERE to see all homes for sale in the Crabapple Crossing Elementary attendance zone (there are 94 as of today); or CLICK HERE to see all homes for sale in the Alpharetta High School attendance zone (there are 245 as of today).
My hope is that the Soft Realty solution will allow us to implement more of the features we know that you want and differentiate our search solution from the lowest common denominator agents.
For now, there is no registration required to use the solution. I won’t know who or if you are trying it, so I’ll rely on you to contact me if (1) you like the solution and/or have some feedback; and (2), if you want to see any of the houses in person.
After all, that is the primary purpose of online search: To find houses to actually go view. So, when you are ready, please reach out to me - you might consider leaving a comment to this post - and let’s not be the lowest common denominator together.
Happy searching.
Posted by Kevin Warmath | Currently 3 Comments »
LiveInAlpharetta.com Blog Speads its Wings and Welcomes Mortgage Lender, Ted Fithian as Contributor
categories: Alpharetta Real Estate, Lending, Real Estate Industry
After having blogged all by my lonesome for going on two years now, I thought you might be tiring of just my perspective. It is time to broaden the message at this humble real estate blog and to that end, I’ve invited Ted Fithian from Home Town Mortgage, a local lender in Alpharetta, to contribute.
Welcome, Ted Fithian, of Home Town Mortgage in Alpharetta
Ted’s first offering is timely now that Spring officially starts in ten days; and as Ted alludes, Spring started in the mortgage and real estate industries a little earlier this year. Take it away, Ted, and welcome to the blogsphere.
Spring Cleaning
One of the things I enjoy most about spring time is my annual ritual of opening up the windows on a Sunday afternoon and cleaning out the junk that has accumulated in the house over the winter. There is something very therapeutic about knowing that the garbage that has been in your way all winter is gone, and now you have more room for newer, fresher and better stuff. Let’s face it; many of us enjoy a good spring cleaning because it just makes us feel better!
Now, I have yet to start on my house, but I am already feeling pretty good about the spring cleaning that has occurred in the real estate and mortgage business.
Contrary to what you might believe or have heard, things in the mortgage business are not all that bad. In fact, I think the outlook is fairly rosy and I am exited to still be in the business. Why you might ask? Well the answer is simple: The garbage has been thrown out and there is more room for the good stuff.
Over the last six months, both the mortgage, and residential real estate industries have been experiencing its own spring cleaning of sorts. We are hopefully nearing the end of a market which has cleared out about 50% of the bottom feeders that jumped in this business during the refi boom in 2002-2003 in hopes of making a quick buck or two.
We are seeing the end of those lenders who, in hopes of grabbing some market share, have quit offering mortgage loans to anyone who could fog a mirror. Can you imagine that at this time last year there were lenders out there offering stated income loans with no money down if you had a 600 or better credit score?
Borrower: "Ok Mr. Mortgage lender, you say I need to make how much to qualify for this loan?"
Lender: "$225,000."
Borrower: "Oh, I made at least that much last year and I plan on making more next year, so I qualify, yeah!!!!"
Thankfully those days are gone, and I say good riddance.
So why all the joy? As we roll into 2008 there will be about half as many realtors and mortgage lenders as there were at this time last year. What that means to the consumer is: Those of us still in the business are more professional, harder working, and probably smarter than those that have not been able to sustain.
For those of us in the business it means less competition, a more traditional market, and hopefully a more professional environment in which to work. Everyone wins. In fact, after I finish cleaning the house, I think I will go start on my garage. That makes me feel better too!
Thanks, Ted, for joining me and I look forward to your contributions around mortgage issues that affect buyers in Alpharetta and the rest of North Fulton. To your point about the "weeding out" of the mortgage and real estate businesses, according to the National Association of Realtors, between 2006 and 2007, almost 20,000 realtors hung up their licenses. These people are now doing multi-level marketing…just joking ;->
Projections for 2008 are that there will only be about 1,000,000 realtors nationwide, down from about 1,350,000 in 2006. That is a 25% drop, definitely some good spring cleaning!
Of the national real estate franchises, according to REAL Trends, every one is down between December 2006 and December 2007 except Keller Williams.
| Company | Dec 2006 | Dec 2007 | Change |
| Keller Williams | 77,210 | 29,643 | 2,433 |
| Prudential | 70,450 | 69,990 | -550 |
| Re/Max | 119,459 | 115,858 | -3,601 |
| Century 21 | 146,070 | 139,895 | -6,175 |
| Coldwell Banker | 123,730 | 116,812 | -6,918 |
Given what is going on in the market, like Ted, I feel pretty good. Our business grew last year and we project it to grow again this year even in this "down" market. I love to clean house, just ask my wife!
Posted by Kevin Warmath | Currently No Comments »
The King Must Die
categories: Real Estate Industry
Growing up, I listened to a lot of Elton John and one of the songs that sticks in my head is “The King Must Die.” No where is this more true than in real estate: reign on the industry is still held by the Multiple Listing Service. How much longer is that going to last?
Is it blasphamy to say that the MLS will (must) die? If anyone from the MLS reads this blog, will they deactivate my account?
Jim Cronin writes: [Because of blogging] hundreds of thousands of voices can question the leadership, decisions, policies, management and opinions of those above and beside them. These voices can and will be heard whether anonymously, individually or collectively. Accountability is now the highest priority for those that took their power for granted. The NAR can be questioned, MLS’s can be questioned, large brokerages can be questioned, top producers can be questioned, the questioners, questioned.
Read Jim’s entire post that discusses how the power that was once found in controling information is now slipping away to the masses (who now have individual voices online facilitated by blogs). In real estate, that power originally was in the form of those phonebook sized MLS books that the realtor dropped by for you to dogear over a weekend. Now that power is locked up with the useid and password of your realtor’s MLS account.
In Atlanta, we have two competing Multiple Listing Services: the First MLS and the Georgia MLS. The First MLS charges agents on both sides of the transaction a fee of .12% (that’s point one two percent) of the sales price. If you do the math, that is $480 on a $400,00 sale, times two.
Georgia MLS doesn’t charge a transaction fee. Rather it charges a monthly subcription fee of $17 or so per agent.
The FMLS does not have a public web site where non-licensed people can search for homes. The only way to “see” FMLS data is via an agent’s website where they allow you to “search the entire MLS” through an arrangement call broker reciprosity.
Georgia MLS does have a public web site, http://www.atlantamls.com/, which is ok, but it doesn’t show the street addresses, so it has limited usefulness.
But here is the big question: Why do we have “private” websites and systems for house listings when technically it is very easy to create a database and serve webpages to home buyers.
Here is the second big question: Why do realtors continue to tolerate the high fees with FMLS, the dominant mls in metro atlanta?
The answer to both questions, of course, is M-O-N-E-Y. There is a tangled web of payments of fees back to the brokers from FLMS. Agents still want to hang onto web access to house listing as a hook to get leads to their websites (me included!).
Conflict of interest; heads in the sand, inertia, luddites? Name your poison. But I’m not sure it is a huge stretch to imagine a world where home listings are wrestled from the hands of the brokers and entrusted to the “public domain.” The question then becomes how do you monitize it - and even more important to all those licensed real estate professionals is how they monitize their licenses.
Posted by Kevin Warmath | Currently No Comments »
