Picture this…main watering hole for the agents of  a large Brokerage office…”Happy Hour!”   The agents are having a drink and sharing their weekly  war stories.  Let’s listen in:

“So Freddie, didn’t I hear you nailed a ‘hogger’ this week?”  “Yeah baby, you heard right…I’m at the house, a $475,000 listing, putting up a rider on the sign that says ‘Great N’Hood,’ and a couple drives up and wants to see it.  Ms. Homeowner was just leaving to get groceries and told me to go ahead and show it, so I did.  They liked it and said to write up an offer.  I showed the offer to the sellers and they went with it.  So…I didn’t have to split the commission with another agent…got the whole 6%, $28,500 for myself…hogged that one!”

See, in a normal situation, the listing agent lists the house at 6% and when a different agent brings a buyer, the selling agent gets 2.7% ($12,825) and the listing agent gets 3.3% ($15,675). The listing agent is the one that covers the marketing expense of the house.  Only makes sense the listing agent should get more…to offset expenses , right? 

 The listing agent probably took pictures (no cost?), made brochures ($15. ?), provided copies of the disclosure document ($5.?), had a yard sign installed ($40.?), spent a couple hours working with the home sellers, before the listing was secured, showed the home a few times (4 more hours?), took calls from other agents who showed the home (two more total hours?), wrote the offer (another hour and a half?), and will attend the closing (another 2 hours?).  So, a total of 11.5 hours.  But I usually find an agent will spend about 20 hours per deal.  So lets say the agent worked 20 man hours and had total expenses of $60.  Landing the hogger means he made $28,500 - $60 = $28,440 divided by 20 man hours = $1,422 per hour.  Yeah baby, hog it up!

Most buyers don’t understand this whole process.  They’ll sometimes be working with their agent but attend an open house or call to see one from the info on a sign and the listing agent shows them the house, writes the deal and gets a “hogger” on it.  The agent the buyers has been working with, sometimes for months, gets absolutely nothing and the agent that wrote the deal…spent maybe, a couple hours with the buyers, gets the big reward.  Bad deal, this?

Agents are supposed to not only ask a potential buyer if they have an agent, they’re suipposed to defer to the other agent, if there is one.  Then, if there is no other agent, the listing agent is required to disclose to the potential buyers, on an “Agency” document, how the process works…and…have the buyers sign it.  But do they?  The Hoggers are in waiting…c’mon uninformed buyers…line up!

When you start working with an agent, if you’re happy with them, have them set up all showings and situations for you.  That’s the only way they can get paid.  Don’t hand over the pay to some agent you don’t even know, who hasn’t done a thing for you.  And, if you do look at a home while in the search process, if the showing agent does not ask you if you are represented by another agent, let your agent know about it…the showing agent is either derelict in their procedure or unethical or plain stupid?  Would you want to reward someone like that?

One more thing (I’ll bet many readers are wondering about this), If a listing agent was happy with the normal way home sales pay out…and…an unrepresented buyer comes along…and…the offer is less than the sellers want…why wouldn’t the listing agent offer up all or part of the 2.7% he wouldn’t have to pay out to another agent, to help his sellers?  We do here…we do even more…check us out?

Beware…the “Hogger” may come your way?

Next: How to get the best deal when qualifying for a mortgage!

Ed

With over 7 million home owners behind on their mortgages, the already huge inventory of homes will get even bigger.  The choices available are phenomenal!

We’ve recently looked at so many foreclosures and short-sale homes and find a good percentage are not beat up at all.  In addition, many are eligible for the super FHA 203k plan, whereby you can get the fix-up cash you need…and…it gets better, since most of these will be devoid of all appliances, this program will kick in cash for that as well.  Nice! 

One of our “pros” recently put his client in a home that sold in the $230k’s just a few years ago.  Now, our client is in a large 4 bedroom, 2 bath home on a large, fenced lot with landscaping, a very big - new asphalt drive, new interior fixtures, new bath fixtures, new electrical box and some wiring, new plumbing, some new carpet and all new - higher end appliances.  He’s on cloud nine, thanks to our pro being informed.

All this was financed through this terrific FHA product and the client has nearly a new home.  He’s in it for the $164,900 he paid, plus the $25k he didn’t have but the FHA plan provided.

If you care to know how this plan could work for you, give us a call and we’ll give you the details.  We have so many first time buyers that know they can get a good deal but just don’t have the money to make repairs.  Find out how this plan can get you in the home you want and put the cash in your hand that you need.

And by the way, for those of you that would like to stay in your home, vs. a short sale or letting it go into foreclosure, give us a call, we’ll help you get the info you need.  No worries, you don’t have to be selling or buying, this one’s on the house!

We come across so many people that don’t understand how the “HAMP” program works…or…they’ve called their mortgage company and get nowhere on the phone with them.  You have to know how to work with these birds and what the rules are because half the time, they don’t know themselves.  Let me share a success story with you:

another of our “pro’s” is talking with one of our clients; a single mom with a serious financial crisis…less hours and very reduced pay, no where near the child support money she needs and…increased mortgage payments from an adjusted rate mortgage plan.  What to do?  She calls her lender and is told they will have to see if she’s qualified to adjust her payment…they’ll get back to her.  Weeks go by, no call back. 

She calls again and gets the same story.  (Enter our guy.)  She tells him what’s going on and he tells her she is qualified and asks her to give him an authorization letter, where he will be allowed to talk with her lender on her behalf.  He called the lender and told them she was absolutely qualified, to read the mandates and get busy helping this lady.  Within days…new ball game.  The lender is cooperating and the mortgage will be adjusted to a comfort level for her.  The family can stay put!

                                                                   Dontchaloveit!

And don’t be embarrassed if you paid too much, have no equity and the bank is on your case. (Cute story,see theWSJ /2/8/2010 by JamesHagerty.)  

My interpretation: the MBA (mortgage bankers association), movers  and shakers…right(?)…paid $79 million for their newer headquarters in 2007.  They thought they might be better off to sell it now.  They have an offer and it looks like they’re going to take it.  They owe the bank $75 million but the offer is for less, only $41.3 million.  Oh shucks…looks like they’ll have to come to the close with the balance…right?  Oh, but some good luck, they may not have drawn the whole amount because the bldg. was under construction.  They’ve refused to be interviewed about their intentions.  Smell fishy to you too?  But wait..there’s more!

Their chief executive, John Courson, in an interview last year, said that people that were “under water” -borrowers owing more on their home than it was worth- should keep paying their loans if they could.  He went on to say defaults hurt by lowering property values and sent the wrong message to their kids.  Well guess what?  He refused to be interviewed about what his Association was going to do about the balance owed.  Can we guess what that means?  Funny stuff, this?  You should feel bad about your situation?

                        Call us, we’d be happy to help you end the financial pain!

Back to the “buy” side; rates we thought were going up are still in the 5% range and jumbo rates are still in the 5.5% range…hey…the time to buy is right now…remember…you make money in real estate “on the buy.”  Also, if you’re buying to occupy, there’s the $6.5k to $8.5k govt. tax credit, or, cash if you don’t owe taxes. But that will blow away if you aren’t under contract by the end of April and scheduled to close by June 29th of this year.  Doesn’t look like they’ll extend it either…so…latch on if you can! 

Next time: “The Hogger.”  (Don’t miss it, it’s pretty funny…pathetic…but funny.)

Ed

You’re probably not old enough to have known a better time to be investing in Real Estate.? For Home Sellers, they’ve probably never seen a worse time to be for sale?   It’s not only a “buyer’s market,” its as hot as it can get for Investors!  You make money in Real Estate on the buy! Buy now, don’t wait, let’s look at why.

The bank bail-out deal did not work according to plan.  The banks got to borrow at 1/4% and lend out at 4.75%+.  Who wouldn’t jump on that arrangement!  Trouble is…few loans are being made, except to highly qualified buyers.  Not only are the Banks messing up the housing market, the PMI insurers are fighting with the Banks, refusing to pay according to their original agreements.   In some cases, the PMI Insurers don’t have the reserves they need to pay up. Case in point, a sad story…

I’m helping a young couple try to short-sell their home.  Both have been laid off, she has cancer and couldn’t return to work even if she wanted to.  They have a young son, have moved in to less than desirable quarters but it’s all they can afford,  they are both under 30 years old, they owe $270k on their mortgage and they’re 5 months behind on their payments.

So I get a ridiculous offer…$167k and the buyer wants $10k back for closing costs.  (I really don’t think the bank will get more than $185k for this house.) The bank does an appraisal and turns down the offer.  Not surprising?  Next, I get an offer for $190k and this buyer only wants $6k for closing costs.  The bank will look at it.  Weeks go by and no answer.  I have to work through a couple different Reps at this bank, to get the proposed deal looked at.  Meanwhile, the buyer wants an answer soon - they don’t want to miss out on the second choice.  We get an answer; the bank will go with the deal but the PMI Insurer wants the young couple to sign a $25k promissory note.  I’ve already sent the bank tax records, closed bank account records, a hardship letter, monthly budget and “comps.”  This young couple couldn’t sign a note for $25 bucks, let alone $25k?  The bank won’t allow me to negotiate with the Insurer.  When I informed the prospective buyer’s agent, she came back to us with a $200k offer and I informed the bank.  They said they would take another look.

Several days later, the agent withdrew the offer and I informed the bank that the deal was dead.  Several days  after that, the bank notified me they would accept the offer - they hadn’t even read my e-mail to them from days earlier.  Who’s in charge at this bank?

We now work with an attorney and a staff totally dedicated to doing short-sales.  This strengthens our marketing efforts and reduces the time necessary to get these done.

This whole mess adds value for the Realty Investor. The stumbling and bumbling of these banks has put a huge number of homes in front of Investors that have good financing sources.  If you can close fast and have savvy lenders, you’re in the drivers seat!  What we’re finding though, is that too many Investors are sitting on the fence, hoping for even more price reductions, before they snap the trigger.  More and more realty tracking firms are projecting a slide in prices for up to another 18 months.  There’s more to consider though…an increase in rates is inevitable and those rate increases may eat up the dollars saved on the buy, within a few years.  The time to buy is right now, especially since the banks, Fannie and Freddie are going to make it harder for buyers to get financing.  Look at these guys…struggling with depleted reserves.  Last week, a WSJ article pointed out that these reserves were supposed to be at 2% but were only at less than .6%

Fan/Fred put the ‘touch’ on the FED to the tune of $111 billion so far.  FHA requires lenders to have cash reserves of $250,000.  But now they’re considering to raise this reserve amount to $2.5 million.  You can guess how many Lenders will no longer be offering their services for FHA deals if this goes through.  They’re in trouble folks - and the loan game is going to tighten up like nothing we’ve seen.  The time to buy…if you can…is now!  Rates will go up, they always have.  When this will start is hard to say but when it does, it will be swift and severe!  Don’t get trapped, buy now while there’s plenty of choices and some money still available!

Now, where to go for the deals? We always look at the areas that offer the best potential for rental and resale.  If you’re not working with a proactive, ambitious Realtor that’s taking their time to do previews for you and pulling ‘comps’ to find the very best deals for you, give us a call…we can find you what you want in less than 30 days.  And…December is one of the best months for an Investor to be busy in the market.

But wait, there’s more!  Sound familiar? There really is more though, here’s how we work with you:

We get together to set up a strategy to find you what you want.  We nail down the best areas to search in.  We set you up with a search program that gets all new listings to you, the same day all Realtors get them…you’ll be at the front of the line so you don’t miss anything.

If you’re too busy to see the homes you have the greatest interest in, we’ll preview these for you and give you a report on them.  That will save you time  - we’ll only set up showings for the homes at the top of your list.  Make sense?

Once we find what you want and close on it, you’ll get 25% of the commission paid by the sellers.  This is to compensate you for your work in the search process.

There are over 1,525 homes for sale at prices less than $150k right now, in just 4 counties! Many of these were purchased and renovated or updated within the last few years.  This means you may have only minor items to repair or just cosmetic work to do in order to rent them out or re-sell them.
Time is money…don’t get caught in a rate increase and lose out on some of the hottest deals ever!  We just put a deal together for an Investor at 5.25%.  If that same deal ($150k) was 7%, it would require an additional $170/month.  Get in while you can ‘cash flow!’

Ed

 Is the “DOW” any help?  Up about $200 one day and down about $250 the next…obvious hype effect created within the ranks of the WS players.  The great bank bailout program - any help there?

What a joke!  You should be in this business (real estate) where transparency reins…the banks are helping themselves but not home sellers and buyers.

Uptick in home sales is touted by the media and govt.  Well, I suppose…drive the prices down as far as you can and buyers will show up.  Short-sales, foreclosures, first time buyers after the $8k deal, most sales under $200k, heck ya, we’re cruisin now baby!

Working short-sales recently, for both buyers and sellers, I find the banks willing to sit on their toxic loans and drag out the process.  After all, while these loans are sitting there, not yet written off, they represent a value far past what they’re worth…right?  When you’re at the bank filling out your net worth statement, they let you put your car down for what you paid for it, right?  I mean, you can play too…no?

Care to go along with me today on a short-sale deal, just for the ride?  Hop on, here we go, hope you don’t have a full stomach for this one.

WARNING: INEFFICIENCY AND GREED AHEAD!

Here’s how it works:  The home owners know they can’t keep up with their inflated mortgage payment.  Besides, the home is worth far less than it was when they bought it.  They want to see if their bank will accept a short-sale; take less for the home than what they owe.  They heard they can save some of their credit vs letting the home go into foreclosure.  They call the bank to see if the bank will allow this.  Bank says…’if you get an offer send it in and we’ll decide at that point.’

Our home owners put it on the market and the listing agent puts the price as high as he thinks it can go.  Now, they have to compete with other sellers who are in the same financial mess…sellers who have been out there a long time, with no results and who have continually been dropping their price.

But our home sellers are  lucky, an offer comes in.  Aw shucks…it’s 20% below their listed price.   Their agent tells them that “this is not unusual…let’s send it to the bank.”  They’ll need to add some documents to the offer and send in a whole package.  They need to send two years tax statements, the latest two months of their bank statements, last two pay stubs, a hardship letter (the bank wants to know why they can’t continue paying), and their present home budget.  The whole package is submitted to the bank. 

Now, why would the bank consider something like this?  Well, the bank knows that if this home goes into foreclosure, they may lose even more money than they would with the offer submitted.  Maybe not though?  The bank has an ‘Asset Manager’ that will make this decision.  So the package goes to the Asset Manager…right?  You’re right,of course not.  It goes though a screening process first.  Probably goes through two or more people assigned to make sure all the info is there for the Asset Manager to make a decision.  (Are you thinking what I’m thinking?  Will this be an expedient process?  Will all that are involved know this is a time-sensitive matter, that both the sellers and the buyers want an answer ASAP? I dunno hey, sure hope so!)

So the package arrives at the bank fax room and is sorted to go to the ’short-sale’ dept.  In a day or two, it goes to screen person #1.  Aw shucks! (my substitute word here.)  The listing agent didn’t send a HUD statement in with the package. (The HUD statement is what both sellers and buyers get at the close.  It has all the financial data regarding the deal and is required by law.  The bank needs to see it now, so they know all costs involved and what their net will be.)

So, does #1 one call the agent to let him know the package wasn’t complete?  This is a test question gang…whatcha got?  You’re right, no call to the agent, the file goes to the incomplete dept., awaiting the missing document. 

The agent was told, when he called to submit the offer, that it would take from 5 to 7 days for the fax to get to the right dept.  He was told to call in about a week to get the status of the offer.  A week’s gone by and the agent calls, sits on hold ’bout 20 minutes…hey…a live voice!  He learns that he forgot to send a HUD with the package and to do so now.  He calls his Title company to get a HUD and within a day or two has faxed it to the bank. Progress!  When will the right dept. get it?  Good for you!  That’s right…in about 5 to 7 days.

Let’s get out of the bank now and turn to the buyer, a buyer who’s been waiting 3 - 4 weeks now for an answer.  What if the banks says no?  Will that other home the buyer was also interested in still be available?  Maybe the buyer should cancel and go with the other one…it was a normal sale and they’d know in a day or two if the deal was going to fly. Their agent tells them to “give it a day or two before they cancel the offer, and move on to another home.”

Back to the bank.  The HUD was received and the whole package is now in the hands of screen person #2.  #2 will often have the package from a few to as many as 15 days before it goes to the Asset Manager.  Everyone is lucky on this one though…#2 passed it on in just two days. (Thanks #2, we know that no one else is appreciative for your wok ethic but we sure are.)

Asset Manager to his assistant: “yeah, this deal stinks.  I noticed the listing agent sent us comparable listings but he just wants to get his commission, can’t trust those birds!  We’re required to do a BPO (brokers price opinion), so get to that dept. and get it set up.”  Notice; he didn’t say when.

Here’s the deal; a BPO is ordered from another broker - other than the one who listed the property, to see if the BPO comes it close to what the offer is.  If the BPO is lower…no problem, we’re in the game.  But if it’s higher, the deal will probably get shot down?  I have some very disturbing news folks, you can guess who they send out to do these, in most cases, not the top hitters in the house.  It’s the agents willing to run around for very little money, the bank does not pay well!

Let’s put a time line on this part, your call here; how long from the time the bank gets everything, to the order for the BPO…and…how long before the bank receives it…and…how long before the Asset Manager gets it?  You say _________. (Days, hours, minutes?)

The sellers, the buyers, the agents…all sittin on nins and peedles, awaiting the good news.  Oh no, oh no!  The bank ordered a ‘drive-by’ BPO but now needs an interior BPO.  It’s ordered though, should hear any day from the BPO assignee about getting into the house to do this.

Ok, so if you’re still with me, we’ll jump off here, nuffs ‘n nuff!  Quite the deal ‘eh?  Think I’m full of hot air?  Many are far worse than this example.

The bank bail out designed to help us all…?

Here’s the good news; there are many ways to bust up this disorganized system and get things done faster.  Weknowwhatandwhentodowhathastobedone! So if you’re in a short-sale state of mind or wonder what your options are, call us!  We understand your pain and we’ll walk you through the process so you can make an intelligent and informed decision about - how to get your pain relieved!  No obligation, we’ll meet, we’ll talk, you’ll get the info you need and then - you can call us, if and when you’d like us to help.  Fair’n nuff?

See you again soon.  Next up: Residential Investors

Ed

             Ever wonder where your precious, hard earned equity goes when you sell your home?

Let’s take a look. Real Estate agents work for brokers and receive a split of the commission when a property is bought or sold.  The broker needs their cut, to support a variety of amenities: the building, furnishings, equipment, office staff payroll, administration payroll, advertising, dues, etc., etc.  So, who pays?  You do, if you’re the seller.

Generally, most brokers take from 10% to as much as 50% of the selling agent’s commission.  That’s considered payment, for the agent operating out of the broker’s bldg. and all the support services.  So, when a Realtor brings a buyer for the listing agent’s seller, the total commission (usually 6%) gets split like this:  (Say, the sale is for a $250k home) - selling agent that brought the buyer sees 2.7% go to their broker, and the listing agent’s broker gets 3.3%.  Then, the listing agent’s broker pays the agent from $ 4,125 to $ 7,425.  The agent that brought the seller, will usually get from $ 3,375. to $ 6,075 from their broker. (Total paid by the home seller was $ 15,000.)  This is how it goes in most transactions today.

There are brokers today who recruit agents on a 100% commission basis.  They pay the agents almost all of the commission but the agent then operates out of their home…no big building and conference room, no phone answering service, no fax, just a place to park their license.

By the way, national statistics show that listing agents only sell about 2 of every 10 listings they have.  The majority are sold by other agents.

When an agent starts a search for a home buyer, they should have learned exactly what the buyer wants in a home.  The agent should know how many bedrooms, baths, finished sq. feet, style of home, what size lot the buyer wants and whether they want a fenced lot, the #1 and #2 n’hoods the buyer wants to live in and the most important rooms in the house…like; open kitchen floor plan…or…huge master bedroom with large walk-in closets and spacious bathroom.  Trouble is, too many agents ignore this procedure.  They tell their customer; "well, when you see one you like, let me know and I’ll getcha in!"  Not good, this!  Some of the websites folks search, don’t give them enough info about the home and the agent doesn’t do his homework, so - they go out to look at homes they have no interest in.  Waste of time and irritating at a minimum!

I’ve talked with agents that tell me they’ve shown their customer 50 homes or more.  How’s that possible?  Those agents don’t get it!  We can find the buyer a home in less than 30 days.  How?  By asking questions and taking them to see only the homes that line up with their interests.  Easy, fast and fun.  We also reward our buyers with cash back at the closing for the effort they put into a search.  So many buyers have told me that when they worked with other agents, they would go to open houses or search the Internet and feed their agent the addresses.  The agent would then set up showings and they would hit the road. In a situation like this, does the agent deserve all of the commission paid by the sellers?  Your call!  When I say we can find a buyer a home in less than 30 days, I’m talking about calendar days.  The total ‘man hours,’ is less than 20 hours, spread out over the 30 days.  We might be out there only a few days and a couple week ends.

Recently, a lovely lady told me that she called an agent from a yard sign message.  She wanted to see the home she was in front of. The Agent directed her to her office and when they met, the lady was told she’d have to pay $ 1,000. up-front, if she wanted to hire the realtor to find a house.  She passed on the offer - you would too, right?  Then, this lovely lady contacts a second realtor and meets with her at the broker’s office.  No talk of any fees, so, she’s all right so far.  She tells the realtor she’s looking for a very small house (she’s near retirement, doesn’t want stairs, a big house nor a big yard to take care of…two bedrooms and 1 bath will do it.  Even a home with less than 1,000 finished sq. feet will work), they hit the road.  The agent takes her to a split level with four bedrooms,  two baths and over 2,000 finished sq. feet.  Whaaaa?  They head back to the agent’s office.  She then learns, that to continue the search, she’ll have to pay $400. up-front.  The lovely lady passes on this offer as well.  (Applause please!)   Cute stuff, these "up-front-fee realtors"

Here’s something else you should know; agents can share their commissions with the parties to a transaction.  For example: The selling agent and the buyer’s agent can negotiate to receive less commission to get a deal done.  Could help both the seller and the buyer?  But many big brokers won’t allow their agents to do this.  Too bad…nice to have the option available, it’s helped us help both parties many times over.  Independent brokers might also offer a lessor fee if they sell your home.  They may reduce the fee to 3% or 4% if they sell your home.  (We’ll do that for just 1.5%!)

So, if you’re a home buyer, make sure your agent is doing the majority of the work, they get paid handsomely for what they do.  If you’re a home seller, ask for a break on the listing fee.  If you can’t get to a win-win solution, call us…you don’t have to fight for it here, we’re on the same team, your team!

Always looking for stories about buying or selling real estate…got anything you’re willing to share?  Get in the comment box and let ‘er rip, we’d love to hear from you!

Ed

Job losses continue to push people out of their homes.  On the other hand, buyers are in a rush to find their home and get the deal closed before the 11/30 deadline for the govt gift of $8k.  Some buyers continue to sit on the fence…waiting for prices to bottom even more.  Rates are great, as most always when we’re in a weak economic phase.  However, with any real positive shift in the economy, you’ll see rates go up.  Rate increases can eat-up any profit gained by waiting any longer…don’t wait…if you can buy, buy now…the market is the best for buyers that its’ ever been!  By the way, if you live in the T/C area of MN, take in our "Buyer’s Seminar," held on 9/22 at the Maplewood Caribou coffee location on White Bear ave. and 694.   Our presentation is short (45 mins.), sweet (you’ll learn how we can get you into a home for discounts as high as $50k to $100k or more in savings) and you’ll come away with a game plan and a strategy to win and to win big!  It’s free but it is RSVP.  So, call us today to reserve your seat…you’ll be glad  you did!

      Call 651-770-5000 and say "RVP for 9/22" (Leave us your phone # and we’ll confirm.)

Investors are sitting on the fence waiting for many of the builders who will be losing their homes in foreclosure.  As soon as they’re out of redemption, these strategists will buy 5-10-30-50 homes at huge discounts, rent them out and wait for the market to turn before selling at considerable profits.  You may be able to get in line ahead of them, we’ll show you how.

Christopher Snobeck wrote in the St. Paul Pioneer Press (8/’09), that Minnesota had 11,089 bank foreclosures in the first 6 months of 2009.  The inventory for these properties is huge and buyers can profit if they act now!

Do you know what banks are willing to take for their short-sale and other distressed homes?  You really can save from $50k to over $100k if you know how to work with them and most of all…how to negotiate with them.  It’s happening every day…don’t miss out, this is your opportunity to start building a huge equity position.  Remember, you make money in the Real Estate world on the buy!  If you don’t buy right, you’ll never sell right!

Have you read recently, where the banks have found another way to haul in the cash and stimulate the economy…by offering "payday advances"?  Wow, how enterprising, give the grunts a 50% advance on their next paycheck and make ‘em pay it back with exorbitant % tacked on.  They’ll stimulate ‘cha!

And Wall Street is posing to compete in the business of buying out Life Insurance policies…give you, say…40% of the face value of your policy now…right now…before you die.  Generous to the max, these lovely fellows.  Feeling stimulated?

I haven’t seen anything any bank is doing to get this housing mess fixed. And, if you haven’t noticed, now that the sub-prime defaults have started to slow up, the high end homes and prime mortgages are starting to  hit the market…great time to buy, tough time to sell.  The homeowner who knows they’re headed for some serious trouble needs to talk with us now…right now.  The sooner you get your home on the market the better your chances are to sell.  Homes that aren’t yet headed for the court house steps are selling.  But it has to be done right, priced right and marketed on thousands of websites…we’ll get that done for you!

Lenders are setting up myriad roadblocks to lending and you have to be working with ‘pro’s’ in the mortgage business.  We work with ‘pro’s’ that get-er-done!  There are some terrific deals, outstanding rates and ways to get financed…if you work with the right people.  Call us, we’ll introduce you to people who will help you help yourself to a brighter future, in a home of your own with a mortgage you can afford!

If you’re contemplating the sale of your home, call us to get a price-point range.  You need to know if you can exit with cash or whether the market condition will prevent you from breaking even.  You need the truth, not some song ‘n dance just to get your listing.  We find that many folks today can’t handle the truth, they’d rather be told they can get a price they want, even if it’s not realistic.  Then, they continue to discount the price, to get to a sale, only to find out they’ll have to come to the close with cash of their own…or…barely break even. Try the truth.  You’ll have less stress and have a better chance of selling.  Remember, when we stop to see your home and visit with you about your options, we have nothing to sign.  You get the information you need and all our contact numbers so you can get back to us, if you want us to help you market your home and get it sold fast!

Buyers, don’t forget…spend 45 minutes with us on Tuesday eve. 9/22 - 7:15PM, at the Caribou Coffee Shop on the corner of 694 and White bear Ave., Maplewood.  It’s free, informative and you could save yourself thousands of dollars by using our methods! RSVP to 651-770-5000.

See you again soon!

Ed

Can you believe how many Real Estate Pundits are “punting” these days?  Problem is…they’re punting off the side of their feet,  little dribbling kicks that hardly count.

For example; a John Crudele article for the New York Post, recently talked about how Greenspan’s indefensible actions at the Fed - prior to the present housing crisis, made a huge contribution to the housing problem. John wrote: Greenspan was all for the looser credit standards and no-to-low initial down payments, so more Americans could own a home.  Greenspan (our punter), from an Oct. 8, ‘06 Reuters article: “The US housing market appears to be emerging from its recent travails and the worst may be over.”

Didja check the date of this “punt?”  10/8/2006?  Another one off the side of the foot!

He’s back to punt again…the ball is snapped, he bobbles the ball, steps forward to punt: “Home prices are likely to reach a bottom early next year when the market absorbs a buildup in inventories, clearing the way for a conclusion of the credit crisis sometime next year.”  (From Dow Jones 5/14/2008 punter Alan Greenspan.)  Well…we’re past early 2009 now, with prices in a steady decline.  Another lousy punt!

Fact is, many banks have not yet ‘dumped’ all their junk homes on the market.  There are thousands more ’short sales’ and ‘foreclosures’ yet to be revealed. Have you seen how many high-end homes are increasing the pile of foreclosures?  What a surprise huh?  When they talk of sales increasing, do they mention that many of these homes are selling at 1960-1970 prices?  Truth is; it will get worse, much worse.

So what about the credit crisis, how is that affecting our housing market?  Huge numbers of bankruptcies are lined up and the lines are getting longer.  The banks that were supposed to get this mess turned around, have turned around themselves.  Going to mortgage requirements that call for a minimum credit score of 620, and a minimum down payment of 10%…is this stimulating sales? How many first time buyers have $20k or more stashed away for the trip to the lenders?

Doom and gloom, who needs it?  Yet, the truth prevails.

As you read this today, I represent several ’salt of the earth’ home sellers.  Sellers that have done it all right…have mortgages they can afford, had equity that had been substantial but is now severely diminished or non-existent.  They can’t get their hard-earned equity out…it’s gone!  Who’s helping the folks that did it right…anybody care about them?  By the way, what’s your best guess…when will this equity come back again…how many years?  Write your guess down, I’ll do the same, we’ll look at this later,

Almost done whining in this post but one more thing; a home seller recently told me his realtor told him, he’d have to charge a 7% listing commission because homes aren’t selling for as much as they used to and he couldn’t make money at 6%.  Can’t make money at 6%, really?  If this seller does sell at his price of $275k, he’ll hand that realtor $8,250 he could have put in his own pocket if he had listed with us.  But wait…there’s more…we may have been able to save him as much as $15,125!  That’s some serious money!

The realty business is reaching “the tipping point” (Thank you Mr. Gladwell), where listing commissions of 5-6-7% will be history.  Realtors no longer have a ‘coveted list’ of homes for sale that buyers can’t find.  The Internet has made it possible for you to sell your own home and get exposure on over 1,000 web sites. for as little as $495. Contact me and I’ll tell you how that’s possible.  The Internet has made it possible for you to compete with real estate brokers and pay as little as 1.5% to sell your home, full services included, I’ll tell you how.

Now, on the “Buy” side, I recently put a buyer in a home that sold four years ago for $240k.  My buyer paid just $135k, got all new appliances, repairs, paint and more.  I was able to get another buyer/investor, a home for $140k that had sold for $282k three years ago. If you’re ready to buy, we should talk.  I love to negotiate to get buyers outstanding deals!  These buyers also received ‘cash back at closing,’ for participating in the search process.  Contact me, I’ll tell you how it works.  All our buyers love this program.

If you can buy now, buy now!  If you need help with financing or want to get qualified for a mortgage, we have a free-fast and easy source…and…it’s all done over the phone.  Just call and we’ll hook you up.

Oh, one last thing, what did you come up with for - when the market will return the lost equity?  My opinion (?)…probably in 2015.  My “punt.”  What’s yours?

Send your real estate stories, we’d love to get you on the post.  We don’t reveal names unless we’re asked to.  So…c’mon, let ‘er snap, whatcha got?

Ed

Boy!  It’s getting to be fun…’eh?  From Amy Bohutinsky, VP Communications at Zillow (See her Blog!):  a survey showed that 32% of home owners think their home value increased in the past 12 months, 17% think their value stayed steady, 51% think the value declined.  What do you think?

She said that in realty, 74% of U.S. homes lost value in the past 12 months, according to Zillow’s Q3 data.

Other industry observers say that the inventory of foreclosed homes the banks are still holding…off the market, could wreak havoc with the already battered and busted-up home market.  Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that have not yet resold or been listed for sale.  So what?  Well, what will happen when they do spill these into the ’sufferin’ market at fire-sale prices?  Sho ’nuff, more declining prices.  A buyer’s heaven, a legitimate seller’s nightmare!

Rick Sharga, VP at RealtyTrac, which compiles nationwide stats on foreclosures, said he  believes there are over 600,000 properties nationwide that the banks have taken back but not yet put on the market.  Wow!

Here’s a story about how a bank’s fire-sale can whip the legitimate sellers in a market.  I had a listing that was a short sale deal.  The builder had about $320k in a home on 10 acres.  It was built in 2004 and had never sold.  It was on the market about two years, then off the MLS but still for sale until they gave it to me to sell, in the summer of 2008.  The builder owed a lender about $270k.  We had the price reduced to $295k and we were not getting any looks.  I talked to the lender about reducing the price to $270k.  I also sent supporting ‘comps,’ to show them what the market looked like in this particular area.  The lender wouldn’t consider my proposal.  Two months later, the home was out of redemption and the lender gave the listing to their chosen Realty Broker.  Can you guess what they put it back on the market for?  I’ll tell you later. (Write your answer down to compare?)

You do know that banks were asked by the FED to hold off the foreclosure process, on folks in trouble with their mortgages, for 90 days.  So, we’ll be seeing a lot more ‘fire-sale’ inventory in months to come.  If you’re thinking about selling your home, don’t think too long…if you do you lose!  Get it on the market now, right now, and test it out.  Don’t take the jive that you have to pay 6% or 7% for a listing commission either.  Tell the agents you talk to…you’ll pay no more than 4%.  (I take listings for 4% and have to pay the selling agent, if I don’t sell it myself, 2.7%.  My fee is only 2.5% if I sell it!) If you’re not in MN or WI, where you can work with me, tell the agents you talk with; you have to take a lot less in the sale process and you expect them to participate in this misery.  If they won’t play ball, call an Independent Broker.  In fact, call an Independent Broker anyway, you’ll be glad you did!

The story above, about the home on 10 acres…the lender put it back on the market for $199k.  Cute ‘eh?  They didn’t want me to reduce it to $270k, they preferred to put it back out there for $199k.  Go figure?  I’ve had many other Brokers tell me similar stories about lender tactics.  Did I just say tactics?  I meant ‘Antics.’

Now, if you think you might be able to sell your home yourself…you’re right…you can!  The National Association of Realtors is planning to spend $4o million on an ad campaign aimed at the ‘For Sale By Owner’ (FSBO) market.  $40 million!  Does that tell you anything?  Any chance they’re getting a beat-down - by the folks that have been successful selling their homes themselves?  Check it out…according to the NAR, their national survey found that only 20% of people who sold their own homes, would use an agent next time.  33% said they would do it themselves again next time and 80% said they were very satisfied with the process of selling their homes themselves.  Still, far too many people selling their homes themselves ever get the exposure they need, exposure we give them in over 1,000 realty websites via the MLS.  But think about it, $40 million on ads to get to the FSBO market(?)…people are much smarter now about how homes get sold.  They have finally questioned the huge, take-away-equity commissions most of the big brokers charge…commissions they need to build the monuments that house their agents.

If you’re in the market to buy…now’s the time to buy.  We can negotiate absolutely super deals from the lower end of the market to the million+ dollar side. I was just showing a client a home built in 2005, where the previous buyer paid $715k and the home was assessed in the high $600’s, it is in foreclosure. The bank has it on the market for $449k and I’m betting we can get it for $325k to $350k.  You have to know how the banks calculate their present and future risks, to know what you might be able to get away with when putting in an offer.  If we team up, to find you a home, we’ll work on a buying strategy that will save you thousands you’d otherwise pay if you’re not careful.  Have you ever seen these ‘Realty Teams’ advertised…you know, "The So and So Team at Such and Such Realty, will help you find your dream home!"  Well, how about your own ‘team’…your own ‘Successful Team.’  When we "team-up", you win.  What’s wrong with that picture?

Have any questions about selling or buying?  Drop us a line we can put in the post.  A lot of readers love to hear the real life stories about real estate.  Do you have  story you’re willing to share, good or bad?  We all learn through synergy.  C’mon, let’s hear from you!

See you again soon.  Best of luck and much success in your real estate efforts.  Call if we can help!

Ed Klein

ed@metrohomesmarket.com

651-770-5000

We’re all waiting for the magic that will bring back a "balanced" housing market.

Getting the banks to loosen their credit policy and most recent - stringent lending standards, might not happen?  After all, that’s a big part of how we got where we’re at right now.

The starting point for buyers is a credit score of 620 or more, 3.5%/FHA or 5% conventional lending down payment, about 3% for closing costs,  a minimum of 6 months on the job and no more than 35% debt to income ratio.

Buyers waiting on the fence for an even greater decrease in prices need to know; increased % rates ahead - may eat up the price difference and cost them more in the long run.

If you’re a qualified buyer…buy now, the timing is near perfect! (Also, check out our "cash back at closing" program.  This puts cash in your pocket when you buy through us!)

For home sellers, get your home on the market now!  The longer you wait the more you will loose.  (Unless you’re willing to wait about three to five years before you try to sell.)

If you’re in trouble with your mortgage and wondering whether to try for a "short sale," or let your home go into foreclosure, call me and I’ll run the pro’s and con’s past you.  Don’t miss this, the difference is huge!

I’m continually amazed at how many home sellers are still falling for the 7%/6% listing commissions charged by so many Realty Brokers.  You can get your home on over 1,000 websites and sell it yourself for as little as $495.  Just call me and I’ll tell you how.

If you go to the side bar in this site and click on the "top 100", you can get an idea what your home might sell for or what kind of a deal you might get when buying.

You’ll hear on the radio and see on TV that…"No one is getting a loan."  Don’t believe it…home loans are being made every day.  The key to success here is to have a well qualified and experienced Loan Officer that knows about all the best programs for you.  By the way, our sources for this help are free, fast and easy to work with.  Most of what you need to know can be done right over the phone.  Call me and I’ll give you #’s to call.

All homes sell, it’s just a matter of time and the right buyer coming your way.  If you don’t know whether or not to sell, let’s talk…can’t hurt to talk?  Find out what the possibilities are. (When I meet with you I have nothing to sign.  All we want to do at that meeting is discuss a strategy, whether you’re buying or selling.)

If you’re thinking about buying, give me a call and I’ll set you up with an automated search, designed to send you only the type, size and homes in the area’s you want to live in.  It’s free, you control it and all our clients love it.  I’ll make sure you see all the new listings for what you want, the same day all realtors do.

We team up with both sellers and buyers to get them the very best deals.  Save yourself thousands of dollars selling and pick up some serious pocket cash when buying.

We’d love to hear from you.  If you have a selling or buying story you care to share, leave me a comment and I’ll get in the next Blog posting.

Ed Klein 651-248-9742

The housing market needs more help than it will likely get.  The early bank bail out money didn’t even "touch" the market.

In fact, many industry sources say that when the banks started receiving their money, they were able to slowdown their REO (real estate owned) activity.  This means that homes they had already foreclosed on…and…homes they had slowed up on marketing, will hit the market soon and increase inventories.  When these are dumped on the market, at greatly reduced prices, it will have a dramatic affect on the sellers who are not in trouble and trying to get legitimate prices for their homes.  It’s not good!

We need help for first time buyers and buyers in the $200k to $300k range.  The banks are really clamping down, doing now what they should have done back in ‘03 when thy started this mess.

Check it out…in ‘03 - ‘06 these banks were wheelin and dealin, handing out mortgages without validating incomes, offering "0" down and allowing closing costs to be put on top of the purchase price, giving loans to people who had credit scores in the low 500’s and debt-to-income ratios of up to 60%.  Not so loose today?  Many banks want to see a credit score of 620+, 40% or less for debt-to-income ratios (including the new mtge amount), and a down payment of 5% or better. (3.5% for those who qualify for FHA.) Add to this closing costs of about 3%, and the buyer has to have about $16,000 or more stashed away.  This scenario is preventing sales in the lower end and keeps tripping uphill, into the high end properties as well.

Take a typical buyer with $800/mo in credit card debt, a $350 car payment and applying for a mortgage on a $200k home where the mortgage payment - at a great rate of 5% - is $1,074.  Add in tax of about $200/mo and $60/mo for insurance = a total of $2,484.  If this represents 40% of income, this buyer has to be making over $70,000/yr.  The buyer pool is shrinking fast, especially with so many - one of two married buyers losing their job?

Now, for some good news; homes are still selling and good loan officers are finding ways to get the buyers qualified.  There are also some terrific programs available through the FHA.  Here’s an example:

I recently got a single mom a home through the FHA 203k plan.  This program allows the buyer to get up to $35,000 over the purchase price to make repairs or improvements in the home.  We negotiated a $122,500 purchase price on a foreclosure the bank was trying to get $130,000 for.  We negotiated for $3,500 in closing costs to be paid by the bank as well.  She got all new appliances, new carpet, repairs and painting done for another $15,000.  All she had to come up with was a 3.5% down payment.   The home was built in ‘04 and was assessed at $198,000.  The prior owners had paid $231,000 for this home just four years earlier.

If you can buy right now, there are so many tremendous deals out there, take advantage of this "Buyer’s" market and buy!  We’ll put you on a free automated search where you’ll see all the new listings the same day Realtors do…put you right up at the front of the line!

If you’re selling, do all you can to protect what equity you have.  We’ll help you find the proper price point for your home.  (This service is free.) You can list with us for as little as 1.3%…or…sell your home yourself for as little as $495.

If you’re in trouble with your mortgage payments and know you can’t sell your home for what you owe, give us a call and we’ll go through the ’short sale’ process with you.  Doesn’t cost you one cent to learn what you need to know.

When we visit with a home owner that’s considering the sale of their home, we look the home and property over, give them a free "comparative market analysis," and leave them with the information they need to make an informed decision. We do not have anything with us for anyone to sign, we do that later if we get a call from the home seller asking us to help.

We can help you sell your home and save thousands!

We can negotiate for you when you’re buying and put cash in your pocket at the close.

If you have a home selling or home buying story you’re willing to share, please post a note on this Blog…we’d love to hear from you!

Back again soon.