Selling

Fun Facts About Short Sales

5 Things You Should Know About Short Sales

It can be awfully tempting to get excited about “amazing,” “smokin” or “crazy” deals. There are certainly enough people out there blabbering on and on about them, especially in the real estate world. In particular, the hype surrounding short-sales and foreclosed, bank-owned homes has reached a fever pitch over the past 18 months. It seems almost impossible these days to walk 10 feet or listen to the radio (for those of you who still do that) for 10 minutes without seeing or hearing somebody expounding on the fabulous virtues of investing in “troubled assets”.

What is a Short Sale?

A short sale is, essentially, an agreement between a bank and a troubled homeowner to sell their home for less than the amount of the loan, in lieu of a foreclosure. This is becoming more common as market prices are falling below the current mortgages held by these struggling owners. The bank, rather than dealing with the expense and hassle of actually throwing somebody out on the street, decides to be “nice” and let them off the hook for a reduced amount, assuming a buyer can be found who is willing to pay a price deemed acceptable by the bank. Hypothetically, this is a good deal for all parties:

• The Seller can get out from under the financial burden of a sinking ship and, hopefully, begin the road to economic recovery. The credit stain of a short-sale is far less severe than that of a foreclosure. I’ve heard of people qualifying for new home loans in as little as two years after a short sale, rather than the 7-10 years following a foreclosure.
• The Buyer can get themselves a new home with a discount of anywhere from 10%-50% off of what the Seller originally paid.
• The Bank can dispense with a troubled asset and put some much needed capital back into its coffers.

All of this can and does happen, though it is not nearly as simple as you would like to think. In fact, most of the time it is a ridiculous quagmire of pointless red tape, mixed signals, and limitless frustration. Here are a few fun facts that I thought should be shared.

1. Short sales are anything but short… The average short sale purchase takes anywhere from 60-120 days from the date of “mutual acceptance”. The Seller has to agree to the initial offer (mutual acceptance), but it is the Bank who really calls the shots, and they can be…difficult* to get answers from. They will commonly take weeks or months to even acknowledge the Buyer’s existence, much less respond to an offer. If they don’t like an offer, they’ll probably just ignore it. If they do like it, it may still take weeks to negotiate inspections, closing details, etc.
* pretty much impossible

2. There is no guarantee… It is entirely common for Buyers to wait for weeks and weeks with no response whatsoever, only to find out that the Bank either A) never saw their offer, or B) got a better one and took it. This puts buyers in the unfortunate position of simply hoping that their offer gets accepted…especially those buyers who are buying a place to live, rather than as an investment. I commonly find myself having to explain this reality to prospective clients…”If you need a place to actually live and have any kind of set timeline in place, you should really just forget about a short sale. There are other factors to consider besides the price…”

3. Banks aren’t as motivated as you think… Between tax write-offs for losses, Private Mortgage Insurance (PMI) covering those losses, and Government cash being delivered in vault-sized briefcases, the Banks aren’t in any particular hurry to change their behavior or do any favors. Sure, to the outsider it would make sense for the Banks to cut whatever deals they could with struggling homeowners. It seems like common sense…stop the bleeding, put some money back into circulation, slow the accelerating depreciation of home values, etc. Good for everybody, right? Unfortunately, many of the banks are being rewarded for their greed and failure, rather than common sense and good business practices.

4. You don’t really know what you’re getting… Though this one tends to apply more to foreclosed, Real Estate Owned (REO) properties, it is pretty common with short sales. Unsurprisingly, people who are about to be kicked out of their homes tend to be a little disgruntled. They are not always inclined to leave the place looking clean and nice, the way it looked in the pictures the listing agent took 6 months earlier when they still thought they could cover their losses. (That one might be a little inside, but if you’ve ever looked at a short sale listing online, then in-person, you’ll know what I mean.) Generally speaking, the condition of the house will depend largely on whether or not it is still occupied. If the Sellers are still living there, it will probably be in pretty good condition, or, at the very least, in whatever condition they are accustomed to keeping it. If the home has already been vacated, watch out! It is quite common for the vacating Sellers to take whatever isn’t nailed down…and sometimes the nails themselves. If you’ve ever seen the History Channel show “Life After People” you’ll know that it doesn’t take long for a structure to deteriorate in the absence of maintenance. Plumbing and wiring problems, leaks and pest issues are all very common. With an ordinary listing, the sellers will continue to maintain the property, even after vacating. Sellers of short sales usually have much bigger problems…

5. The sellers are real people… This is one that is very significant to me, personally, but is one of those things that buyers would prefer not to think about, like how many people have died in that cute 100-year old craftsman they’re so excited about. Oh, how ironic. I opened up a section on sympathy and sensitivity with a joke about dead people… Welcome to the complicated world of Rob LeRoy. But I digress… When considering the purchase of a short sale, it is important to be mindful of the fact that your “great deal” is someone else’s lost dream. Sellers of distressed properties are usually normal, kind and productive people who have fallen on hard times via job-loss, divorce, or illness…sometimes all three. Remember that these are commonly desperate people who just want to move on with their lives with what little remaining dignity they can salvage. Please don’t take advantage of that. If it’s a short sale, sure, you might be able to haggle down the price a little. At that point it is the bank’s money, after all. Often, though, a homeowner will try to sell before they are totally underwater. In these cases, they have little-to-no room to negotiate much of anything. I would urge prospective buyers to be as sympathetic as possible. Sure, I know…it’s just business. I guess…but that’s just not the way I want to live my life or treat the people in it.

Whew! Sorry to end on such a downer. To make up for it, I invite you to watch this fantastic video that highlights the fun that can be had buying foreclosed, bank-owned homes and short sales.

Thanks for reading! For questions about this article or to hire me as your agent, you can reach me at 206.883.6668 or rob.leroy@exprealty.com

Also, please take a look at my website, www.TheRealEstateNovelist.com, or find me on Facebook!

Please forward this to anyone you think might be interested. I’m always excited to expand my readership!

Home-Staging Consultations FREE with New Listings!

If you are thinking about selling your house this year, you might want to get ready sooner, rather than later. With the impending expiration of the First-Time-Buyer tax credit, many experts in the industry are nervous about the potential market adjustment to follow. Given that first-time buyers accounted for an astounding 47% of all home sales last year, it stands to reason that there is the risk of a slump in sales following the expiration of the tax credit.  At the very least, it looks clear that there are a whole lot of would-be buyers running around scooping up whatever they can find while there’s still time. With the expiration of the tax credit set for June 1st, time is of the essence, and I’m here to help.

How About  a Free Home Staging consultation?

From now until April 30th, I will be teaming up with Bellingham Home Staging to provide complimentary home staging consultations on all new listings.  The fabulous Kimberly Lee of Bellingham Home Staging will give your home the makeover it needs to sell quickly for a great price.  So yes, you will have to lose the fuzzy tapestry of dogs playing poker ( I really miss mine from college…), and she’ll probably make you hide any self-portraits from past vacations (sorry, but buyers don’t need to see you in a thong…), but it will be worth it. Don’t worry, we won’t mock you for having bad taste (at least I won’t)…it’s not your fault. Some people just have a gift for design…just like some people have a gift for writing humorous real estate articles…ahem… I should clarify that Kimberly will be telling you what to do…not me. I’m too nice to tell you that you have bad taste. I will, however, bring donuts. What is Home Staging?

“Home staging is a proven advertising method in real estate, interior design, and retail that uses principles in design, psychology, and marketing to make a house more attractive to the emotions of a purchaser. As Consumers, we see this every day when we look at our favorite issues of Better Homes and Gardens, Martha Stewart Living, shop at Ikea, or look through a Crate and Barrel Catalog. Items are placed, arranged, and organized to make the consumer want or need them. Everything is neat, orderly, and neutralized to attract a wide range of buyers who have differing styles and tastes. Ultimately, we want buyers to see and feel themselves living in your house. “ – Kimberly Lee.

If you have us list your home, you will get much more than this fantastic staging consultation. You’ll also get a custom blog article to accompany the MLS listing. I’ll write and in-depth portrait of your home that goes well beyond the limitations of the MLS, print media, and other traditional marketing avenues. You’ll see your home prominently featured on this website (with 7,000 monthly visitors!), as well as several similar sites to maximize exposure across the entire internet*. We’ll also broadcast the details by email to our database of thousands of website subscribers. For examples of my previous listing articles, click here, here and here. The combined force of our staging and unbeatable online marketing strategy will give your home the exposure it needs to sell for the best possible price in the shortest amount of time.

*87% of home buyers use the internet to look for homes, and 85% use buyers agents, who of course search online, as well.

For more information on Bellingham Home Staging, click here or join the Facebook fanpage here!

For more information on the benefits of home staging, in general, click here.

Click the thumbnails below for some before-and-after staging shots

Thanks for reading!  Please leave your comments below. If you have any questions or want to schedule a listing consultation, please feel free to email Rob LeRoy directly at rob.leroy@exprealty.com or call me at 206.883.6668

Be sure to check out my other website, TheRealEstateNovelist.com!

What are my closing costs?

Another common question from buyers as well as sellers is, “what are my closing costs?”  Some typical closing costs in real estate transaction are

Title search fees – is the assurance of clear title to the property and title insurance to defend against any future claims made on the title by circumstances that were not picked up at the time of the title search.  This fee is based on the price of the transaction.  It will vary from one company to another but they usually pretty close to each other.  Traditionally the seller will buy the title insurance policy to protect the buyer, and the buyer will buy a title insurance policy to protect the lender that is providing the loan for the transaction.

The appraisal fee — this fee is paid by the buyer to have a professional appraiser give their value of the property.  The appraisal is based on recent comparable sales.

Prorated property taxes, utilities, and association fees — these fees are based on the percentage of the year, or month in terms of utilities such as water and sewer, that you own a home.

Insurance fee — you can usually expect to prepay the first year of your insurance premium

Recording fees – these are fees charged to record the change in ownership usually by the county.

Document fees — these can be fees for drawing up different documents involved in the transaction.

Escrow fees — this fee is usually shared by both buyer and seller and pays for the escrow company that is handling the transaction.

Credit report fee — this fee is for the lender to render buyers credit report.

Other miscellaneous fees — these can include courier fees, electronic transfer fees, flood determination fees, digital storage fees, retrieval fees, underwriting fees, wire transfer fees, tax service fees, e-mail document fees. You won’t necessarily be paying all of these, but you will pay some of them.is

Loan origination fees and discount points — the loan origination fee can vary from 0.5 % to about 2% of the loan amount pays for the cost of providing loans.  Discount points are percentage of the loan amount paid to buying down the loan rate, resulting in a lower monthly payment.

Sellers additional fees — the seller will also pay a percentage of the sales price in excise tax to the county, and commissions to real estate agents.

You real estate agent can usually give you a pretty close estimate of what most of these fees will be.

Here is another of those Cheesy videos that Rob introduced us to yesterday, simple drawings and talk about closing costs.

A behind the scenes look at a Bellingham Real Estate Agent’s Day

Got a great call from my mom.  It’s at 1:55 on a Tuesday afternoon, the kind where she asks what I’m up to, forgetting the time difference between Rhode Island and here. In her defense, and playing to my role as a good Irish son, my mom is not at fault here.  She has no idea what I do all day, from day to day, and it’s nearly impossible to chart my hours.

The kicker? She worked in Real Estate for a while, but in what seems like a complelety different eon (not agism) with all the leaps and bounds technology has made in the last 20 years. 10 years. 5 years even.

If I were a doctor (she wishes), lawyer (ditto), or Indian chief (absent from Career Day), a call at 1:55 on a Tuesday would mean I’m knee deep in an operation, a court case, or negotiation for Cape Cod.  But who knows what a real estate agent does, minus the few hours you spend in his or her car? Your answer can be as different as your Starbucks order, depending on the over-caffeinated gal or guy you’re working with.

So I thought a real, and I mean REAL look behind the scenes, here’s what I do during the week to prepare for the time I get up, to when I fall asleep watching I, Robot for the 10,000th time at 11:30.

Client: Registers interest in the ether that is the Internet, in real estate in some shape or form.  Their info is sent to me via e-mail, phone call, or reference from someone who thinks I might be a good fit.

Me? Wake up, to the office at 8:00 to see what’s happened during the course of the night in the way of A) homes on the market that are new, and B) have gone pending, pending inspection, or sold. If I were a listing-centric agent, I’d also check the expired and cancelled listings, in hopes of inviting the seller to a new conversation about their next move.

Then I’m checking stats; what have homes sold for in the past 6 months? Anything else is a different season, equating longer to checking the salmon season regs when it’s deer season. Completely different animal. Unless you’re in a higher price range, in which there’s a longer period these homes are seasoning on the market. If I, haven’t been checking the stats on a weekly, daily basis, there’s no way to know this.

We’re about at 8:30, at which point, as I’m human, I’ve already checked Twitter 400 times, Facebook on my phone to see what folks are up to, and Mint.com to see if I’m still financially in business.

From here? Taking a look at my East Coast clientele, and their folders of favorite homes they’ve saved in the last 12 hours, and planning my phone calls appropriately. Planning phone calls? Yup. I need to have updates, new possibles for you, so the call has actual value to you, and I’m not beamed back to 8th grade, where I call and say,”so, uh, what are you up to?” Then I’m making those calls, leaving messages, and setting new times to call. I’m calling so you don’t have to remember to. It’s to keep me in your mind, so when you DO decide this might be a move you want to make, I’m the guy who’s been helping you, and I’m front of mind.

In between calls, I’m checking e-mail, and answering other calls from the previous day, because every home I visit, the listing agent and seller want to know what I think.  It’s a good system of checks and balances, and beats the hell out of the impersonal e-mail where I fill out a survey.  E-mails can range from changes in banking programs, home warranty stuff so when your “new to you” dryer breaks, you’re not cursing my name at Home Depot as they load in another $500 incidental you didn’t plan for when you moved.

Then I’m out the door. Walking through homes clients have chosen as favorites, new listings on the market that have caught my personal eye, and property in hot spots in our area.  I’m more inclined to preview Fairhaven condos than Vacant Land in Maple Falls, because that’s not where the lion’s share of business resides. I’m taking photos of the interiors of some to keep them straight in my head, giving my clients a better idea of the layout, and sometimes because the photos online? Not so good. They’ve either been touched up more than Mickey Rourke’s Glamour Shots, or just haven’t given an accurate depiction of the property as it sits today. Anybody with a home on Alabama Hill who listed their home in August, and has a green lawn in the photos, knows what Willis is talking about.

This takes me to lunch. Where I sleep a good 4-5 hours. Martinis do that.

The reality? I work through lunch, because my clients don’t. This may be that time where they’re at work browsing for homes, and if I can talk to you while you have real estate on the mind, I jump back into the circle of people trying to help, rather than get you to sign up for Quickstar.

I’m also sending out info on school systems, neighborhood info, recent political news, like land grabs off the Guide, how to correctly navigate roundabouts in Cordata without indirectly paying for someone’s four years at WCC, whatever it takes.  I’m a concierge for Bellingham and Whatcom County, and love that part of my job, as it keeps it dynamic.

Now I’ve got a showing. Just get in the car with my list and unlock the homes. Nope. I’m making appointments, ensuring your 45 pound dog is allowed in the building should you love this place, checking that the house feeds into the high school you want. And putting this together as sweetly as possible without the aid of a Trapper Keeper so it doesn’t look like the cluster it could be. Because two homes into the tour, we might find out that your needs are completely different that we originally talked about. But I’ve spent the morning previewing other possiblities, so we re-adjust the flight pattern, and keep on keeping on.

Right about now, my mom has called twice. And texted. Because my brother thought it was a good idea to open that Pandora’s box to a string of “Lerve you.whts the 411?” messages. Yet my concentration is on the client. Because this might be the only chance I get. I’ve gotten an e-mail during our tour letting me know the loan program we’re using is expiring soon, so if today’s a bust, we’re going back to formula.

Back to the office after the tour to debrief what we liked, disliked, and I’m keeping notes to make sure one home doesn’t blend into another. The contracts here can be up to about 4,000 pages long, depending on the situation, which is great, because it protects the parties involved. But we’re going through it line by line, because this is the largest financial purchase you’re going to make in the next 5 years;  you had better know it back to front. I’ve memorized these forms, and broken it down so it’s understandable in a previous morning, so I’m not bumbling through this meeting like Mr. Furley at Spacecamp Orientation.

Putting the offer together, and coordinating the delivery, then back to the office to catch up on calls and e-mails that have come in during the last 4 hours or so. And rest.

Plan out tomorrow in my head so I can sleep. Then carry on with the rest of my life. This day would be ideal.  But much like all things planned, I’ll reschedule in the middle of the day at a moment’s notice to make sure my client’s needs get met. That’s my job. That’s my day.

And during all this, I’m taking care of my marketing department, my accounting department, fun department, and generally working on staying a good guy. Because no one wants to work with a tool, save Bob Vila.

The point?  You’re going to see a calm and collected person, excited to find your next place or property, in an organized fashion, because you need to know that throughout all the mess that’s going on in the world, you’ve got someone who’s going to make it okay.

Why Isn’t Your House Selling? 10 Likely Reasons (Part 1 of 3)

Unless you’ve been living in a cave, you know that the past 18 months have seen record numbers of homes hit the Bellingham real estate market.  And not just Bellingham’s market, but all markets across the country. The combination of panic, desperation and fear has caused “For Sale” signs to spring up faster than Rush Limbaugh’s assistant when somebody yells “free cake”.  The good news is that the tide seems to be turning toward a more balanced and stable market. However, that isn’t really all that reassuring if you’ve been watching your house sit on the market for 6 months and your agent keeps pestering you to drop the price.  There are lots of reasons why your house could be getting the cold shoulder. Some of the usual suspects:

1. Your house is over priced. Duh! That’s always the first thing anybody will tell you, especially your agent! And while that may be true, it could also be-

2. Your house is ugly. Sorry… but houses aren’t people, and looks do matter. I don’t care how much personality or sense of humor it has- if your house is bright pink with wood paneling and tortoise-shell mirrors, I’m not calling again!

3. Your house is viewable by “appointment only” because you have sensitive pets…and 12 kids…and visiting relatives. Hey, do you want to sell the house or not?!  Nobody’s gonna buy it if they can’t even get in to see it.  Make it easier for people to get in there.

4. Your house smells like 1933. Again, sorry, but if your house smells like dust, mold or the recently deceased, and the walls are the color of Austin Powers’ teeth, it’s time to make some changes.  Try some new paint and re-carpeting. You’d be surprised at what a difference that makes for a minimal expense. It doesn’t even need to be nice carpet- the buyer will probably just tear it out and refinish the hardwood floors somebody decided to cover up in the early 60’s for god-knows-what reason. The point is, it won’t smell like FDR’s inaugural bathrobe anymore.

5. Your house smells like cats. Litter-boxes are very much like screaming children: if you have them, it doesn’t take long before you figure out how to pretend they aren’t there.  However, other people don’t have that luxury. Other people can still hear and smell… Imagine you’re out at a restaurant and I’m at the next table over from you. Although you are evidently oblivious to it, I CAN hear your kids screaming and whining, no matter HOW good you’ve gotten at hiding inside your parental isolation bubble. The same is true when it comes to the stench emanating from that cat-toilet you keep in your bedroom. Look, I’m not going to judge you for letting an animal repeatedly relieve itself five feet from where you sleep. To each their own, as they say…But come on, it stinks…and I don’t want a house that smells like that, and neither do my clients. End of story.

6. You have a collection of life-sized circus animals on display throughout your yard.  I have actually seen this… Hey, I get it…the grandkids love the zoo and you thought it’d be super-cute to create a happy place for them to visit.  Well that all changed when you decided to put your house on the market. It’s not about the grandkids, anymore. Now your house is reduced to a punchline for snarky blog writers, and the first reaction of visitors is snickering and laughter. Probably not the reaction you want at an open house. Lose ‘em!

Click these links to read Part 1, Part 2, and Part 3

This post simultaneously published by Rob LeRoy at theRealEstateNovelist.com

Why Isn’t Your House Selling? 10 Likely Reasons (Part 2 of 3)

7. You have WAY too many knick-knacks and personal items covering your shelves and walls.  If your house looks like an indoor flea-market, potential buyers have a hard time imagining their own crappy junk littering the house.  The same goes for pictures of your wedding, vacations or grandkids- if home shoppers feel like they’re in your house, it’s hard or them to begin to think of it as their house.  Get yourself a professional staging expert.  It is statistically proven that staged homes tend to sell faster and for more money, usually more than enough to cover the staging expense.  At the very least, do what you can to de-personalize your home. I know you have to keep living there and you want it to feel like it’s still your home. But remember, once you’ve put it on the market, it’s really somebody else’s home. You’re just waiting for them to show up.

8. Your neighbors live like extras from “Deliverance”. No matter how nice your house may be…no matter how clean the kitchen is or how fresh the paint is on the trim, if your neighbors have 3 broken down cars on their lawn, beer bottles lining the driveway, and four layers of paint in various colors peeling away from the walls, your house will not sell quickly.  If it looks like your neighbors are selling more drugs than Rite Aid, buyers will be scared away.  Maybe it’s time to have a friendly chat with them.  For instance, you could tell them about CarAngel, a charity organization that will haul away their old beaters.  Maybe you could offer to hire a couple of college kids on Craigslist to repaint their house or clean up the yard. Sure, it might be awkward, but it will probably go a long way toward getting your house sold without having to drop your price.

9. You picked the wrong listing agent. Believe it, or not, there are some not-so-good agents out there. Choosing a qualified listing agent is crucial and there is a lot more to being qualified than having the ability to stick a sign up in the yard.  Being somebody’s friend-of-a-friend or mother-in-law, or having 30 years in the business are not sufficient qualifications.  Agents with decades of experience are often less likely to be aware of the latest developments in technology, rules and regulations, or marketing strategies, all of which are essential.  Veteran agents are often a little too comfortable with their own track record and fail to remember that this business requires constant education, adjustment, and re-invention. Agents who are socially awkward, ill-prepared or under-qualified are often successful in spite of themselves, simply because they have been doing this for so long or because they happen to be related to somebody.  There are also plenty of part-time real estate agents out there who decided to get a license because they were “thinking of buying a house, anyway” or “have lots of friends and family considering the market” and thought “hey, why not?” However, real estate is NOT a part-time job. Good agents do this full-time, and then some. A great agent spends countless hours learning the market, networking, and mastering the art of negotiation, so that when they offer advice, they do so with the confidence and integrity that is only afforded through real effort and earned knowledge.  Choosing an agent for any other reason leaves you exposed to the threat that they might inadvertently sabotage your listing or your offer, either through ignorance or social ineptitude. Either way, it’s costing you money.

Click these links to read Part 1, Part 2, and Part 3

This post simultaneously published by Rob LeRoy at theRealEstateNovelist.com

Why Isn’t Your House Selling? 10 Likely Reasons (Part 3 of 3)

And last, but certainly not least…

10. You’re cheap- Guess what- if you aren’t offering a competitive selling commission (aka buyer’s agent commission or SOC)  on your listing, you are doing it wrong. It is time to get serious about selling your house, and short-changing the professionals whose job it is to get it sold is a great way to shoot yourself in the foot.  This is one of the biggest (if not THE biggest) financial transactions of your life. Do you really want to trust it in the hands of someone who is willing to take a fee-cut without even negotiating?  While that last statement applies more to the listing agent, it goes both ways.  There are agents, like myself, who understand that the ethical (and common sense) approach is to show homes based upon the needs of their clients, not their personal bank accounts.  Those agents will show your house regardless of the offensive and laughable 1.5% SOC you are “offering.” Those same agents are probably smart and confident enough to remind their clients that the SOC is negotiable and that their expertise and effort deserve respectable and commensurate compensation. And then there are the rest of the agents. Here’s an example of what is probably a very common scenario.

An agent has out-of-town buyers visiting for a weekend. They have two days to find a suitable house, in order to close in time to start a new job. There is only enough time over those two days to comfortably tour 15 homes. An MLS search reveals 30 homes that more-or-less match the buyer’s needs. Let’s say 4 of those homes have reduced SOC’s, the rest have 3%, with all other factors remaining equal. Which ones do you think will get crossed off the list first?

That’s not even the worst of it. There is an unfolding trend that has become a major pet-peeve of mine. It starts with the aforementioned reduced SOC. Then there’s the price drop. As I mentioned earlier, the price drop is almost always the first thing that happens when a house isn’t selling. And that’s fine…it is usually a smart move, especially if your house has been listed for more than a few weeks, or months, these days… However, you’re making a huge mistake, in my opinion, to reduce the price before raising the SOC. Here’s a real-world example I saw earlier this week:

A home was listed for 6 weeks for $350,000 with an SOC of 2.25%, which is low by any standard. This week they dropped the asking price to $325,000. In case you don’t have a calculator handy, that’s a $25,000 drop. Want to know the difference between a 2.25% SOC and 3%? At the original asking price of $350k, that is a difference of $2625, barely more than 10% of the price drop. How does that make sense? Keep in mind here that it costs you NOTHING out of pocket to raise the commission vs. dropping the price. I understand that staging, painting and re-carpeting is expensive and requires out-of-pocket investment with no real guarantee of a return, but this costs you nothing. Instead, the person in this example just gave away $25,000 before any possible offer negotiations could begin. Why not do it the other way? I’ve seen agents offering 4% commissions, or combinations of cash bonuses to buyers and their agents. In the above scenario the owner could have raised the SOC to 4% AND offered a $10,000 buyer bonus (for paint, repairs or closing costs, etc.) and still come out $1000 ahead vs. the price drop. It won’t necessarily get your house sold, but it will probably get you a lot more attention, and you can bet it won’t be the first one crossed off the list anymore!

Thanks for reading! Your comments are always appreciated. You can leave them below. If you’d like to reach me directly, my cell# is 360.510.2230 and my e-mail is rfleroy@gmail.com

Click these links to read Part 1, Part 2, and Part 3

This post simultaneously published by Rob LeRoy at theRealEstateNovelist.com

What Buyers Should Know About Appraisals

Just about everybody has heard of an appraisal and knows what it is- an assessment of a home’s value based on empirical evidence like recent sales, replacement costs, and the subjective opinions of underpaid appraisers hurrying from one gig to the next.  What many Buyers don’t know is that, even though they get to pay for it,  the appraisal isn’t for them, it’s for their bank.  While it’s true that the bank wants you to know you’re getting your money’s worth, they are really much more concerned about whether they are getting their money’s worth.  See, most of the time, banks are the ones who are really buying the home, even though you get to have your name on the title.

The true purpose of the appraisal is to assess the dollar-figure at which the bank could reasonably expect to sell your house in the event of a foreclosure.  They have to take the worst-case scenario into account to make sure they don’t get stuck losing any of their money if they have to take your house back.  This makes the appraisal a tricky piece of the buying process, because banks won’t lend you more than the amount of the appraised value. That means that if your appraisal comes back lower than the agreed-upon purchase price, you’ll end up having to cover the difference or re-negotiate with the Seller, either of which could potentially cause the deal to fall apart. Appraisals are especially critical and unpredictable these days, with regulations on appraisers and loans tightening daily as a result of the loose standards of the past several years that contributed significantly to the recent market slump. It is no longer a foregone conclusion that the appraisal amount will be high enough to cover the spread.

I am not suggesting  that appraisals aren’t accurate or useful. They most certainly have their value.   I just think it’s important to let Buyers know up front what some of the potential hurdles and complications might be. That way, there won’t be quite so much flop sweat to clean up the week before closing when we all huddle together gnawing our collective fingernails, waiting to find out if the appraiser’s thumb will point up….or down.

Thanks for reading! You can read more of my articles here.

Sudden Valley Real Estate Market Report for July, 2009

The following is a quick analysis of the Residential Bellingham real estate market in Sudden Valley.

There are currently 114 homes for sale. Homes are priced from $99,900 – $995,000

• Average Asking Price is $337,056 Average Days on Market are 117 days
• Median Asking Price is $288,000 Median Days on Market are 75 days
• Sold in July: 16
• Average Listing Price $252,806
• Average Sold Price $248,994 Average Days on Market 98
• Median Listing Price $242,450
• Median Sold Price $235,000 Median Days on Market 93
• Pending Sales Last Week: 6 Total pending sales: 34

Report Finds That Real Estate Agents are Normal People

According to a recent report by a highly reputable investigative entity, most… several…that is, some real estate agents out there are actual people, just like you- with hearts, minds, maybe even a personality!  I can tell you how to spot them.

I know the drill- you’re up late one night, semi-casually considering the possibility of maybe buying Bellingham real estate but don’t know which website is the best, so you sign up to a few, then over the next few days or weeks you get bombarded with phone calls and e-mails from all kinds of people asking you about your potential plans to buy or sell or move or invest… It’s annoying. Some of them stammer, others talk too fast. They leave awkward, rambling messages on your voice-mail and always seem a little bit jittery and caught off-guard if you actually pick up one of their phone calls. I know, I know, it’s all just so uncomfortable…like talking to your mother late on a Sunday afternoon when she’s been out golfing* with “the girls”.  Just remember though, they’re more afraid of you than you are of them. Just be gentle and let them speak.  Who knows, you might get lucky and find one that actually knows what he’s talking about.  That’s especially likely to happen if you dial 360.510.2230 and ask for Rob LeRoy.  He’s one of the best. If you don’t believe me, read this article (#5) written by an industry insider who’s “in the know.”

*drinking Bloody Marys

And another thing- it’s important to keep in mind that this is what we do for a living.  All day, every day…losing sleep, missing birthdays, missing weddings (sometimes our own), ignoring medical check-ups and Happy Hours…wait, we actually never miss those…but, still, you see what I’m getting at. This is our job, our career, so don’t be so surprised when we call and remind you that we exist. It is not our intent to irritate or harass, but rather to educate and provide you with a service, whether that service involves an actual transaction somewhere down the road, or simply some casual, professional advice or instruction on the fascinating world of real estate.  If you’re truly interested, let us know.  If not, don’t be afraid to say you’re just browsing.  We can take rejection, believe me.  Only about 1 -to- 2 out of every 20 people who sign up to a real estate website  actually buys something.  The rest are just browsing, researching, or laughing out loud as they read an exceptionally humorous article written by a gifted young real estate agent.

Good agents are happy to help either way, but it certainly saves everybody a lot of time if you just let us know up front which side you’re on.

Thanks for reading!  Please leave comments below, if you have any. If you’d like to read more of my posts click here.

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