Haunted Houses

Gallows humor.  Sad but true.  Maybe it will be better next year.  Happy Halloween!!

Exclusive New Home Feature

We did a little piece earlier on the amazing photographic skills of Realtors® (and others for that matter). I thought I would periodically post new findings of these excellent photographs. I'm not dipping into any one's private collection. These are pictures posted on the Internet for public viewing. Yes, that means someone not only took the picture but downloaded it, viewed it, and deemed it acceptable for uploading into the public view.

Here is my latest find. A photograph of a much sought after feature in your new home. A light!. And not a particularly attractive light at that. This picture should definitely close the deal with that buyer.

But My Home Is Worth More Than That!

Since we have spent some time addressing buyer issues I thought it about time we threw in some thoughts for sellers. Here is the one I hear the most. "My home is worth more than that." That, of course, being the "current" fair market price.

Wikipedia, as usual, has some interesting information on what a market is. You can read the entire article but here is an excerpt:

The function of a market requires, at a minimum, that both parties expect to become better off as a result of the transaction. Markets generally rely on price adjustments to provide information to parties engaging in a transaction, so that each may accurately gauge the subsequent change of their welfare. In less sophisticated markets, such as those involving barter, individual buyers and sellers must engage in a more lengthy process of haggling in order to gain the same information. Markets are efficient when the price of a good or service attracts exactly as much demand as the market can currently supply. The chief function of a market, then, is to adjust prices to accommodate fluctuations in supply and demand in order to achieve allocative efficiency.

One of my favorite quotes from our broker for sellers is "Your home is only worth what someone is willing to pay for it." While that logic is true in any market, it rings loud and clear in today's real estate market. Your home is likely not worth what it was a year ago or maybe even a month ago. The question to ask yourself is "What would I pay for this house if I were buying it?" If you can step outside your emotions and set aside what price you need or want for the home, you will probably get a truer answer than what you are feeling.

Or you could listen to your Realtor® who should have a good sense of what your home is worth in the current market. Here is an obvious rule of thumb: If you have no showings and no offers, your price is too high!

If you want to sell it, price it to sell. If you don't want to price it to sell, don't sell it.

Home Buying Tip #3 - Show Me The Money

Prequalify.

It may sound backwards, but you should shop for a lender and a loan before you shop for a house. Talk to the lender about different types of mortgages and financing options. Perhaps you have enough down-payment to avoid PMI or you’ve heard a friend talking about ARMs but don’t really understand the long-rang implications. Once you know how much house you can afford and what types of loans will work best for you, you can find a property that matches these needs.

There are several advantages to prequalifying. It will assist your Realtor® in identifying homes that meet your financial needs. No need to look at houses you can't afford (can't get a loan for). Looking at homes that you can't afford may be recreational but it wastes your time and can make the homes you can qualify for seem inadequate.

In addition, prequalifying will allow you to move quickly when you do find the home you want to purchase. Particularly in a sellers market, offers accompanied by a prequalification letter tend to move to the front of the line. Sellers don't want to take their home off the market just to find out that the buyer doesn't qualify to purchase the home.

Going through the prequalification process will also assist you in your budgeting. The lender should ask you all the questions necessary to help ensure that you can afford your mortage payment given your income and other expenses.

In short, if you are prequalified you'll be well positioned to answer the "Show Me The Money" challenge.

Home Buyer Tip #2 - Budget This!

This is Tip #2 in our continuing series of tips for new home buyers.

Budget, budget, and budget again. If this is your first house or your tenth, you still need to complete a budget. Factor in all costs of your new home, including HOA dues, Mello Roos, PMI (private mortgage insurance), homeowners’ insurance, utilities, maintenance, taxes, the cost of furnishing your new home, and anything else you can think of. Don’t forget while budgeting to include any upcoming life changes. Are you planning on changing jobs, having a baby or getting married soon? All of these factors should be a part of your budget. Plan for the worst case not the best and then add 5% to the total.

Unfortunately, many people only consider the principal and interest (PI) payment on their home loan. This is the number most often quoted by lenders. The above costs can easily add 50% or more to your monthly payment creating a burden that most can't cope with.

Always choose to impound your tax payments if you can. Paying your taxes on a monthly basis rather than lump sum payments will help smooth out the pain of those larger payments. In addition, it provides an enforced savings account for your taxes just in case you are one of those that forgets about the tax payments until they are due and then have to scramble to find the money. Nah! That never happens.

As a yardstick, lenders used to loan up to a PI of 50% of your monthly income. Recently, due mostly to the mortgage crisis, that percentage has been lowered. While only you can gauge what monthly payment you are comfortable with you should think very seriously about spending above 35% of your income for the total monthly expense not just the PI.

Lights! Camera! Uh Oh!

The ubiquitous real estate pictures are another source of technological wonder and marketing ignorance. In the future I may post some of my local MLS favorites but I thought I would start you off with these marvelous collection.

I won't belabor the point here. The pictures speak for themselves. As a Realtor® all you have to do ask ask yourself, "Would I want those pictures of my house on the Internet?". If you can't take a decent picture, for criminny sakes, have someone else do it for you, or at least don't post them for public viewing. On the other hand, thanks for the unending stream of humorous photos. They make great material for bloggers.

There are many of these sites on the Internet. Just search for "Bad Real Estate Pictures". To get you started here are a few of my favorite collections:

1. Thanks to Atol Kay in Connecticut for this collection.
2. Here is a collection of bad MLS photos from Orlando.
3. My personal favorite is here. Click on the NEXT button to move through the presentation. Thanks Norm Fisher.

That's it for now. More on (bad) real estate photos and camera technology later. Remember 80% of home searches start on the Internet. Have you got you best phoot forward?

Excuse Me! Are You Going To Use That Technology?

As I said in the beginning there would be a few technology rants in this blog. Here is the first.

According to NAR Statistics something like 80% of home buyers use the Internet to research their purchase. Compare that with the 55% that went to an open house or the 47% that read a print ad.

So how can any serious (IE: Professional) Realtor® not make use of or at least mind their presence on the Internet. I'll muse on many of these topics over time but today's rant of choice is email addresses.

If you have an email address you or your designate MUST check your email and answer it AT LEAST twice daily. Think of the impression you would give if you didn't return phone calls or voice mail messages.

Get an email address! How do you think the majority of those 80% that start their home search on the Internet prefer to communicate?

Forget the free email addresses. It doesn't matter if it is Gmail, Hotmail, Yahoo, AOL, etc. they are unprofessional and the email domains that are most frequently swept into your prospects/clients spam folder. Oh the horrors of being your prospect's spam.

I find the use of free email addresses most amusing for Realtors® that actually have their own domain name (IE: SusieSellsRealEstateToo.com). If you have a Web site you have a domain name and if you have a domain name you can have and email address with that domain name. Why would you want a Web site and not brand that Web site name at every opportunity? Why would you want to advertise another company (Google, Yahoo, AOL) when you can advertise your company? Most people are savey enough to realize that the part after the @ in an email address will usually get you to a Web site.

Advertise your email address and your Web site. Put it on your cards, your stationary, your voice mail greetings, your flyers, your post cards... anywhere you can!!! Remember 80%. Oh, BTW (by the way) make sure you spell your email/domain name correctly. I can't count the times I've seen Realtors® advertise email addresses that are ill formed (Bob@MySite) or had a typo in their Web site address. That's worse than having the wrong phone number on your yard sign (Only 63% of buyers considered a yard sign).

If you're technophobic, don't believe the numbers, or just don't care that's understandable I think. It's your choice. If you choose to not use email then don't advertise an email. The next worst thing after not having and email address is to have one and not use it (RE: item 1 above).

Bottom line: In this day and age you need to embrace technology to its fullest if you want to be competitive. You need to be professional and technically astute if you want your share of that 80%. If you're not interested in that 80%, don't pretend. Go for the 34% that considered a home book or magazine. Yikes!!! I wonder how many of the 34% use email? Oh, and throw away your pager.