Thursday, April 30, 2009

Explanation Please....

How many times have you just signed a contract without reading it or going over the entire agreement? I know I have many of times. Although, in Real Estate, whether you represent the seller or the buyer, it is so important to go over these fine details with the clients. No you are not a layer and no you cannot interpret the language of the contract but you can go over with them and if they have questions that you can not answer they can contact their lawyer. So many times I have spoke with clients that said they didn't know what they signed, they just signed. I know that clients aren't going to remember everything they sign, but they should be able to recall that you took a significant amount of time going over the contract, and all the addendum's explaining what each one meant to them, and they will remember the jist of things.
According to Article 9 - Standard of Practice 9-2
When assisting or enabling a client or customer in establishing a contractual relationship (e.g.,
listing and representation agreements, purchase agreements, leases, etc.) electronically,
REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of
the contractual relationship being established prior to it being agreed to by a contracting party.
(Adopted 1/07)
Understand it is time consuming but so worth it in the end and it is our duty.

Wednesday, April 29, 2009

1st Qtr. 2009 Market Statistics for Greater Waco

Ok, we have just finished compiling the numbers for the first quarter of 2009. As I have been preaching all along, 2007 was such an inflated market that the market needed to readjust itself and that it did, but on a whole we are still under the national average for the decrease in the average sales price of a home. Just based on the 1st quarter of 2009, we are down approximately 8% from our very best year in 2007, and if you base it from last year we are only down approximately 4%. You could also look at the numbers in a positive way, if you compare 2008 to 2007 we droped by approximately 5% and comparing the first quareter of 2009 to 2008 we only dropped 4% in the average sales price of a home compared to 2007- 2008. There are some great deals out there to be had, but I predict that the market will be making a shift here very soon and buyers beware......it will become a sellers market. Sellers will soon take advantage of the interest rates themselves and make up for the low selling prices. Interst rates are at an all time low and if you are in the market to buy you had better do so soon, you have all the reasons in the world to buy now, 8,000 tax credit until 12/2009, low interest rates, and some good home prices compared to recent years.

If you would like more information that is updated monthly , please visit www.mymarketreports.com.

These numbers are deemed accurate but not reliable. These numbers are based on Residential sales only

A Reverse Offer

Do you have a fantastic listing, gorgeous inside and out, with countless upgrades, lots of showings but no offers! Sound familiar? When Real Estate gets tough, we have to get innovative. Non-traditional marketing and pro-active methods become necessary. exactly what the Innovative Realty Group does. Waco is not a tough Real Estate market, but when you have a fairly specific property and don't have traditional buyer's looking at it, it's definitely a challenge!
Recently, a video from 60 Minutes, 20/20 or Dateline show aired about what Real Estate agents and seller's are doing to get homes sold in hard hit areas. The video was about a family in California who couldn't sell their home, since everyone else in the area is trying to do the same thing. They were priced well, had lots of showings but no offers. So their agent suggested they do a "Reverse Offer." In the video, the hopeful sellers had a family come through for a second showing. Normally this is a sign that an offer is about to be made, but the potential buyer's were also viewing a home down the street for the second time. Being innovative and pro-active, their agent suggested they make a reverse offer. This is where the sellers actually make an offer to the potential buyers!

Probably not something you should do every time you list a home and get a showing. I know your thinking, sounds a little desperate. Well if you a seller needs to sell a home, aren't they a little desperate anyways?

Real Estate is not the same as it was 20 or 10 years ago and we need to keep the innovative ideas flowing, why must we play the same old game of lets list the price high so we can haggle down to what we will really accept, (frustrating everyone), why not just give your best offer to someone who may be interested to see what could happen, your not out anything. Is this a desperate attempt to sell a house? No, its a pro-active measure to get your clients home sold, and that is a Realtor's job.

A reverse offer is to encourage a serious buyer to get off the fence and do something. Sometimes people just need a little push!

Overpriced Listings - Stagnant Properties

Have you ever wondered why there are so many properties on the market that have been listed forever? Have you ever thought, I know it is because they want to much for that property?

Did you know that we as Realtors have a code of ethics and standards of practice and within those we have duties to the public and other Realtors? Probably not.

I know this is a controversial subject but that is alright, we take our profession serious and wouldn't hold anyone to a standard that we ourselves wouldn't practice.

Today I want to talk about overpriced listings. Yes, we have all seen them and I am sure at times when we first started in the business we might have taken one unknowingly. Overpriced listings hurt our market, increase our days on market, and give the perception of a bad market. There are many reasons that a house may be overpriced, (ex. the owner needs to pay off bills, they want money for their next purchase, they bought too high, they financed all of their closing costs and have lived in the home for a short time, it's their house and they feel it is worth it) but the fact is, when your house is overpriced it becomes stagnant on the market and people begin to wonder what is wrong with it.

Really people should wonder what is wrong with the Realtor for listing that house. We are the professionals and as professionals we should know what the house is worth. Again, several reasons why a Realtor may have listed that house, but a big one is, self promotion and sign calls. Yes we know your house is overpriced but that is ok, we will get calls off of the sign and refer these ready willing and able buyers to another home that isn't, or we will let you suffer for a while and then get you to drop the price. My question is....if we are professionals who do this for a living day in and day out what sense does it make to take an overpriced listing? Wouldn't it make much more sense to have properties priced right on the market that sell quicker with less hageling because the general public can trust that we as Realtors have priced the property in line with what the market is doing? If not,the owner is only going to dislike you after months of it not selling, you decrease your credibility as a professional, you spend money on advertising something you know isn't going to sell (or do you advertise it), and above all those you have just violated

Article 1 - Duties to Clients and Customers - SOP 1-3

When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)

Standard of Practice 1-3
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

I know you are saying "I am not deliberatley miselading the owner", and I am sure your not. All I am saying is that if our duty is to the client, why would we mislead them in thinking that they can get something for their house that you yourself know they can't. Think this is crazy? Look at some houses that have been on the market for a long period of time and look at the price reductions or expired listings.

Example - Waco Association of Realtors MLS - *This information is deemed reliable but not guaranteed. (these numbers are strictly residential)

as of 4/29/2009 -

Active Listings 1384
Sold Year to Date 515 (divided by 4 months = 137 per month)
Months of Inventory 10.10
(this means if we listed nothing else from this day forward it would take us 10 months to sell the inventory we have based on the average numbers of homes sold per month from 1/1/09 to today)
Average Days on Market 157

How many properties have been on the market past the average? 515 listed for more than 160 days (3 days more than what the average days on market is)

If we take the number of properties listed over 160 days (our average number of days to sale) out of the active listings (1384 - 515) that would decrease our Months of Inventory to 6.34 months.

Who really is in control of our market? Is your sign in that yard helping the client? Remember we have duties to the public and other Realtors.