Buy and Sell with Marilyn Bell

A recent news article I read talks about how Groupons (deep discount coupons offered for a minimum to maximum amount or group – groupon.com) aren’t always bringing the vendors repeat customers or profits as hoped.   ( http://www.tennessean.com/article/20101024/BUSINESS01/10240336/E-mail-Groupons-may-not-bring-repeat-customers-profit )

Yesterday I finally redeemed a Groupon.   I think the deals offered are amazing and I have purchased several.   I was excited to finally use one.   It was for a spa service.   Now I understand why the Groupons aren’t bringing repeat customers.   I got an absolute lack of customer service.   I even made it known when asked why I bought the Groupon that I’m a frequent spa customer so I thought I’d give this one a try.   Much to my husband’s dismay (actually, I think he’s pretty okay with it), I go to the spa more often that most people.   And I go to way more expensive spas than the one I tried yesterday.

I tipped the girl based on full value, and I even spent additional money when redeeming my Groupon.   I bought a little $20 hair spray because I use that product regularly.   It certainly wasn’t because anyone tried to sell me anything of the hundreds of products they had stocked.   It certainly wasn’t because I was happy about the horrible makeup application that transformed me into an ogre.   I have had my makeup done where I thought, “who is this gorgeous girl?”   This time I thought, “I look horrible.   I look worse than with no makeup”). They automatically must have pegged me for being a cheap, worthless customer.   Their mistake.

It reminds me of when I went to buy a brand new Honda Accord wearing sweats and a tank top.   The folks over at D****** W****** told me they couldn’t help me.   They honestly said that.   I told them I was looking for a good deal on an Accord.   I went to C**** and bought one that day.   I made sure to drive back by D****** W****** later in my brand new Accord.     My friends in the car business told me I got “parking lot qualified.”   Sure, I look young.   Yes, I’m small.   Yes, I was dressed like a bum.   Yes, I had money in my pocket and excellent credit.   Too bad for them.   And too bad for the spa yesterday because had they not “Groupon qualified” (that’s my term, you can use it) me, I may have spent $200 on products.

What does any of this have to do with real estate?   A lot actually.   I hear agents complain or even drop clients who aren’t making a big purchase.   My first thought about that is I really enjoy what I do.   I like helping people buy homes.   It feels even better when it’s a first time buyer.   My second thought is that I don’t really like to do anything else, so I’m in this for the long haul.   And what the long haul has shown me is that first time buyer isn’t going to live in that house forever.   That buyer will call me in a couple years (or actually this week, 13 months after) buying that home because I treated them with dignity, respect and didn’t treat them any differently because they were buying an entry level home (this week it was a $95,000 home 13 months ago).   I didn’t treat them like 2nd class clients.   I didn’t do it because I was counting on another two transactions from them a little over a year later.   I did it because that’s just my way of treating people.

I feel bad for the agents who aren’t giving great customer service to everyone.   I understand you can’t work with everyone.   I’ve turned down clients who were being unreasonable (like wanting to list $100k over market value because whatever the commission or price – 100% of zero is ZERO), but I’ve never treated anyone differently based upon their price range.

Two last quick points to hopefully drive the point home and have clients setting expectations and have agents not already doing so improve their customer service.

That client from 13 months ago that now wants to move up.   I didn’t actually represent him.   I had to refer him to another agent since my broker at the time (I was working in a model home) wasn’t registered to bid on HUD homes.   That agent treated him poorly.   She could have taken these two upcoming transactions from me with better customer service.   Instead, she took the half of that first deal that I gave her and now is bartending (last I heard), and I’ve got two more transactions at a time when I have not actively been seeking new business (yes, I have been unofficially on maternity leave for the better part of two years).

Another client who was looking for a cheap place, well, he turned out to be an investor.   So yes, he buys a junky place.   He fixes it up and turns it into a nicer place which means a bigger listing than the buy.   Then he does it again… and again… and again… (keep repeating cycle).

So my fellow agents, let’s all raise the bar and remember to provide excellent customer service to everyone.   And to everyone else, don’t settle for anything less than excellent customer service.

I’ve been in my current home for a little more than 2 years now.   It’s a new construction subdivision.   It’s not my preferred style of living, but with two young children (and a third now on the way) it made the best sense for us at the time.   Sure, I miss my urban living and amenities, but the trade off for now is worth it.   My children don’t need arrange playdates where we have to get packed up and go somewhere.   They just go outside and their are plenty of children their ages to play with.   My older son even gets to walk to school (okay, walk home because I drive him down the street in the morning) with his friends.

Anyhow, as in many recently built subdivisions a lot of homeowners put no money down and now find themselves “upside down” in their homes.   I fortunately bought as wisely as I could on the front end and have stayed about even.   However, I knew when I moved here this was not the best investment but it was worth it for my children.   My previous home continues to climb in value, but this one stagnates.   And I knew that would be the case for a while – even without the housing crisis, as long as builders are building shiny, new homes to order for new homeowners it makes it harder for existing homeowners in the neighborhood to sell.   I accepted that, and accepted that I would have to stay put for a while or rent out my house before moving on to another one.   However, I think my value is about to go down and push me “upside down.”

When I moved in a house near mine was listed on the market.   It sat there and sat there.   It was overpriced.   When it expired I went to those neighbors to talk to them.   I checked and saw that before I moved in they had it listed with someone else at an even higher price.   In talking to them, I found out they would be in a short sale position.   They were prepared for this and had even requested the hardship package from their bank.   I told them I could help them.   I told them the home was obviously overpriced as it hadn’t even had any showings.   Unfortunately, I also had to tell them if that first time the home was listed it had been listed at the most recent list price it probably would have sold.   They wouldn’t have made any money, but they wouldn’t have had to short sale either.   They had not been in the house a year and the agent in 2007 was telling them they could list for $40,000 more than they paid.   The market was already showing strain.   At that time builders were packing up and closing up shop in the neighborhood.

So this conversation I’m having with them is in 2008.   The homeowner really seemed to understand what I was saying.   Rather than list at a realistic price the first time out and break even, he now was in a position of having to short sale and most likely bring $20,000 to the table. Even with the most recent listing, at the time the home was listed, he probably could have come really close to breaking even.   He probably could have had the agent negotiate a lower commission to help that.   Now, I don’t like to just cut commissions like it’s a blue light special, but in all honesty most agents give up half their commission to a short sale negotiator once a short sale is triggered.   Not only is that commission going away, but the transaction just got a lot harder.

I truly feel like we’re on the same page and about to relieve his stress and fix his problem.   He says he will talk to his wife.   I think great, I’ll be able to help them get out from under this house and stop the hemorrhaging.   The very next day another agent’s sign is in his yard – with a higher list price than it most recently was.   The overpriced listing he had before I moved in prevented him from getting out and breaking even.   The overpriced listing he had when I moved in sat there while breaking even slowly turned into needing atleast $20,000 at the closing table or a short sale.

Now on to today.   That last sign has been gone for several months.   I haven’t talked to the neighbor again about it because now he’s so far underwater (probably $50,000 now) that I just don’t have the energy to help him through.   I was busy with investment properties, clients and a new baby on the way.   I feel like a terrible neighbor, and maybe a terrible Realtor, but you can’t help those who won’t listen.   A couple days ago a sheriff visited them.   My only thought was that it had something to do with foreclosure.   Yesterday, a U-Haul trailer was attached to one of their vehicles.   This morning a moving company was there.   I’m fairly certain they just lost their home to foreclosure.

Sadly, I think it may be a strategic default.   Back when I spoke to him he was current on his payments but wanted to leave the state to be closer to his home office.   He travelled and telecommuted mostly, so he could have stayed here.   However, he saw his homes value dropping rapidly, and he didn’t get out while he could.   The worst part is I don’t see his value dropping much more, if any.   He had the biggest floorplan in the neighborhood.   He was taking the hardest hit and the declining values really just put things back in balance.   He bought in 2006 in the boom times.   He overpaid, and he overbuilt for this neighborhood.   I’m sure the bank will resale his house, and it’ll bring a fair price – albeit $50,000 less than what he originally paid for it.   The neighborhood will recover and continue to stabilize.   And that transfer from my neighbor back to the bank and then the resale to someone at $50,000 less will probably finally push me “upside down.”   I bought as wisely as I could on the front end, and I’ve weathered declines, but this one will really affect me.   It’s sad because it didn’t have to happen.   The homeowner could have priced realistically 2 years ago and got out if he really wanted to.   He could have gone on to greener pastures with his credit rating in check and a new homeowner could have come in, and if that homeowner would just stay and weather the storm my value never would have been pushed “upside down.”

So, overpriced listings don’t help anyone.   They didn’t help my neighbow who I’m now fairly certain has been foreclosed upon.   It didn’t help any of the agents who spent their time and money to have a sign in the yard for no reason.   It didn’t help this agent who could have sold the house for him and minimized the damage it did him.   It didn’t help this homeowner who now is finally “upside down.”

Homeowners, I promise you an overpriced listing will hurt you in the long run.   Especially in this market.   Values are still declining.   The longer your home sits on the market and doesn’t sell, the more value you’re losing. The longer your home sits on the market, the lower the offers will be if they do come in.

Agents, I promise you an overpriced listing will also hurt you.   Sure, every once in a while if there’s something unique about a house and that right buyer comes along, it’s possible to sell an overpriced listing. However, don’t hold your breath on that.   An overpriced listing will eat away at your time and marketing dollars for no payoff.   It’ll give you a reputation among other agents that your listings are overpriced.   And it’ll tell other prospective sellers that you don’t get the job done as they drive by your sign every day and it never changes to pending or sold… frankly the only change to the sign will probably be to another agent’s sign once that listing expires.   Don’t let that be you. Don’t let that be your seller.   And don’t let that buyer pass you buy because they found a more reasonably priced home.

I have to say as a whole I have worked with some great real estate professionals.   I know in any profession there are a few bad apples giving the whole bunch a bad reputation, but I’ve been fortunate to work with some great Realtors and consider myself in good company.

However, I have heard in passing of agents complaining that certain home inspectors are “deal killers.”   Now, I understand what they mean, but wouldn’t a bad deal rather die than their reputation?   I’m in it for the long haul, and that means my reputation is as important, if not more important, than any “deal.”

I love the “deal killers.”   Why?   A thorough inspection with all it’s ugly warts is beneficial for everyone involved – for a long time to come.

A worse than expected inspection gives a buyer a golden opportunity to re-negotiate terms, negotiate repairs, or give the buyer a fuller picture of the home – and if this is really the home they want.   Even in a nearly new house, a buyer can usually negotiate repairs in excess of the cost of the inspection itself.   At the least, the inspection will pay for itself.   In extreme (and actually, not so extreme) cases, the buyer can negotiate repairs in value more than 10-fold the cost of the inspection report.   We don’t use it as a shopping trip, however, the initial offer is based upon assuming the home is in a certain condition. If it’s not in the condition previously thought, it is fair to adjust the condition or price accordingly.

A worse than expected inspection gives sellers a reality check as to the true condition of their home.   That reality check may give them the much information they need to price their home accordingly.   It can also give them an opportunity to fix any potential “deal breakers” if the report kills their current deal to prevent that on the next offer.   I have often found spending a little money on repairs and updates prior to getting an offer results in higher offer prices and higher selling prices.

A worse than expected inspection gives a buyer’s agent the opportunity to show their clients they know about repairs, contractors and reasonable costs.   It also gives the agent an opportunity to walk away from a money pit.   If this happens, that’s okay.   There are plenty of homes on the market.   If that agent gets that buyer into a great home with no costly hidden surprises down the road, that reinforces the agents reputation with the buyer(s).   It shows the agent didn’t just care about “the deal,” but about getting the home that best suited the buyer – and that very well may be one that doesn’t need extensive repairs.   That kind of reputation is what leads to referrals.

A worse than expected inspection gives a seller’s agent good, solid evidence as to the condition of a home.   This can help the seller face the reality check and figure out a plan to overcome any obstacles.   If concessions need to be made, the inspection takes the heat, not the agent.   This also gives the agent the opportunity to share information about repairs, contractors and reasonable costs.   These days people can pay a few hundred dollars to list their home on the MLS for sale by owner.   The guidance and negotiation an agent provides during the inspection process is one of the ways agents set themselves apart.   The seller’s agent may even be able to negotiate to have all repair costs added to purchase price.   Whatever the case may be, seller’s agents have an opportunity to show their skills, build their reputations and earn future referrals.

So how are “bad” inspections “deal killers?”   It sounds like win-win-win-win all the way around to me.   Trust me, an “easy” inspection that leads to an “easy” deal and an “easy” close can lead to BIG problems – big repairs, big money, big lawsuits… no one wins in that situation.

then why do so many agents send out e-flyers without it? Agents will go through the trouble of sending out beautiful HTML emails with professional photographs – and no price.   Or they’ll make a pretty Postlet and post it everywhere – with no price.   They’ll publish that pretty Postlet to Facebook – with no price.   Why?

Some may make excuses like, “we’ll the template I was using didn’t have a place for it” or “it just didn’t show up on the link when I posted it to Facebook.”   You can get around that.   Put the price in description field.   Put the price in the email subject.   Put the price on the comment field on Facebook.   Heck, put the price in the title.

I understand the concept of give a little, get a little.   Maybe that’s what they’re aiming to do?   I don’t know.   I know that if I go for give a little, get a little, I include the price, but maybe leave off the exact address. Actually, I include the address.   Let the buyers drive by and see it and decide they want a showing appointment to see the inside. My thinking is, include enough to get ‘em interested – and what interests most people is the price.   Even agents will say all day long that it all comes down to price.   So why leave that out of your marketing?

When I have a buyer client, I keep tabs on what fits their criteria.   If I get a flyer with no price that may be in the area or style my buyer is looking for, I almost automatically assume it must be out of the price range.   Why?   Because I’ve been looking through their price range, area, style, etc.   If I see a flyer that fits everything else and the home is just a complete stunner, sure I’ll take a minute and look up the price, but often I’ll skip it.

But what if I somehow missed it?   Or it was priced so well but just out the buyer’s preferred zone – but the price would have made it acceptable to the buyer?   What if the price is just a tad over the buyer’s price range and we haven’t been looking there?   Maybe an argument could be made that I’m not doing my due diligence, but I don’t think so.   I’m actively looking for what meets my buyer’s criteria. If there’s a home that doesn’t meet the buyer’s criteria, but the price overcomes the criteria then the listing agent should be marketing that price.   Because part of my due diligence to the buyer is using my time wisely, and to me that doesn’t equal looking up the price for every e-flyer, flyer or posting I see without a price.

Maybe I’m missing something.   I’d love some fellow agents to give me some other perspectives.   What do you think?

I was recently at a continuing education class and so many realtors were whining and complaining.   At one point someone asked if anyone remembered the days of multiple offers and if anyone had any recently, so up my hand went.   I was the only one.   These obviously weren’t listing agents of foreclosures, but then again, neither am I.  

 Not only will you run into mulitiple offers on foreclosures, but you will on any home in good shape that’s priced right.   The biggest mistake I see in pricing right is pricing based on the listing prices of comps, not the actual sales prices.   If you price based upon sales prices and have the home in great showing shape, that’s all you need to do to get multiple offers.   Also, pricing just above a very common search parameter will leave you lagging behind.

 What if you’re on the buying side and trying to get noticed in the crowd of multiple offers?   What do you do then?   This has kept me busy lately.   Gone are the days when you show a few houses and the client picks out the one they like.   In the past 6 months I’ve had several clients had to make atleast five OFFERS before they could get a contract on a house.   And that’s not including how many I called to check on before placing an offer to make sure the seller (usually the bank) hadn’t already accepted an offer.   There were probably twice as many as those.

 So how are we getting them into homes?   Well, as a realtor I let them know on the front end that’s how things are right now when you’re trying to buy a hot deal (usually foreclosure).   Of course, they can be hesitant at first so we go through several rounds of making offers that get rejected or countered or sent out for best and final (common when there are multiple offers on the table).   Then, the clients get serious about listening to me.   Now what do we do?   WE ACT FAST!

If the comps show the house is priced right, we  go in at least at list price.   If the comps show that it’s overpriced we either walk away or submit a fair offer and expect that there may be other buyers out there that automatically assume a foreclosure is a good deal – they’re not.  

I ask the listing agent prior to making the offer if there are other offers on the table or if there have been many showings.   They’ll often tell me.   If the answer to either of those is yes, we go above list price.   I don’t have a formula but together we decide what we think the other offers may be.   This varies on the price range we’re working with.   Then, I encourage them to top that (by how much again varies with the price range).  

We also add on to the purchase price any concessions being requested by the buyer – most often closing costs.   One instance where I don’t do this is a home warranty plan.   Home warranties are inexpensive.   Rather than ask for it and add a few hundred to the offer price, I like to leave them off.   The buyer can purchase this.   The cleaner and easier the offer looks, the better.

We submit the offer with a strong preapproval letter stating that assets, income and credit have already been checked.   If the client allows it, we include the FICO score.   We also send a copy of a BIG earnest money check.   It shows you’re serious.   Every little thing you can do can help.   Sure, a lot of offers are submitted online with the net amount automatically calculated, but not always.   When the seller is looking at more than just the net number, it’s not always the highest offer that wins – it’s the best offer.   Unless you’re up against a cash buyer, usually a strong preapproval letter and a big earnest money check will make your offer more attractive than one that may even be higher.

 We doublecheck with the lender to see what the best estimate is for the closing date and put that in for the closing date.   Previously I was seeing the bank addendum’s coming back with a per diem for each day the transaction closed late – usually $100 per day, but now I’m seeing them come back with that crossed out.   I’m glad to see that go.  

Another important step is to check with the listing agent to find out what the seller’s response time is.   Sometimes the bank’s have the automated systems with offers submitted online and quick response times.   Other times the banks can take forever.   Find out what you’re dealing with and adjust your offer expiration accordingly.   Don’t give them too much time to get another offer, but don’t let the offer expire before they can get back to you!

 I said it before, but I’ll say it again.   You have to ACT FAST!   Remember there’s an inspection contingency.   This isn’t like several years ago when you could go and view the home a few times and sleep on it and make your decision.   You need to get your offer in.   If something comes up in the inspection process you can negotiate to get that remedied or walk away.   You’ll get that big earnest money check back.   It’s a myth that the banks will do nothing.   If repairs need to be made for loan approval, you can usually get that done.   I even know someone who recently negotiated new paint and carpet on a foreclosure!   Yep!  

 So don’t be discouraged if you’ve been trying to get your great deal for 6 months now.   It can be done!  

FIRST TIME HOME BUYER WORKSHOP

Thursday, August 6, 2009 at 6 p.m.

Hyatt Place, 202 Summit View Dr, Brentwood TN 37027 off I-65 at Old Hickory Blvd

Realtors, builders and mortgage professionals will be on site.   Refreshments will be served.

Topics to be covered include:
$8,000 tax credit
Steps to home ownership
Benefits of owning vs. renting
Why right now is the best time in 20 years to buy
The mortgage process
What you need to know about your credit
How much home you can afford.

Call or email to reserve your seat today!   marilyn.m.bell@gmail.com   (615)681-8191

Are you serious?

I had another post started, but then I got a call from another agent.   She was calling to change the time of her showing tomorrow.   She said she had to cancel a lot of her showings for tomorrow since the buyer didn’t want a pool and a lot of the showings for tomorrow had pools.

First of all, shouldn’t that have been discussed on the front end?   Or atleast while they were going through homes to schedule showings?

Second, if a buyer thinks the home is an option, shouldn’t the agent go show it?   It was initially scheduled for tomorrow at 4:15.   Then she called to reschedule for 2:45.   The home is occupied.   Yes, my seller should be as flexible as possible for the showings, but she was.   She arranged for 4:15 to work although it was a bit inconvenient for her.   When the call was made to reschedule, the seller said we could do 1:30 to 2:30 or the original 4:15 time.   The listing clearly states seller has dogs that need to be put up before showings.   I’m sure not every other home was occupied with pets that needed to be put up before showings!   Sure, the agent would have had to make a few more calls to rearrange things, but come on!

Buyers, if your agent says at the last minute they cancelled a showing, you should ask why.   And if you want to see the property, you should say so.

Sellers, the more exposure your home gets, the better chance you have of selling it.   I know

Agents, it is doing your clients a disservice if you refuse to show a property because it will put you through the inconvenience of moving a few things around and making a few more calls.

I’m just flabbergasted right now and don’t want to go off on a tangent.   That’s it for now.   Hopefully tomorrow I’ll post what I had initially planned to post for tomorrow.

Aside from that, today was a great day!   I got a contract hammered out on a listing that was only on the market for 6 days!   Not a foreclosure or distressed sale.   Priced at the top of the range because the condition of the home was in the top of the range.   Sellers, trust your agents and listen to them and you’ll get the results you’re seeking!

Today one of my buyer clients missed out on a GREAT deal.   She did what she was supposed to do and got preapproved for a mortgage.   Figured out the right price range in which to look.   But she didn’t have the preapproval letter in hand.   We requested the letter last week. We had the offer prepared and signed yesterday.   We were still waiting on the preapproval letter.   We got it today.   As soon as I got it, I called to say I was submitting the offer – and they had just accepted an offer that morning!

Preapproval is the first step you should take when thinking of buying a home.   It gives you the reality of what you can afford, and what the payments would look like.   To get a good agent, you’ll also have to be preapproved before you’ll be shown any properties (I knew this particular client was preapproved because I was cc’ed on correspondence with the mortgage broker).   And this is where my client got burned today – on most listings today – and almost EVERY foreclosure listing, the preapproval letter is required to submit the offer.

Sure, realtors want to know you’re preapproved so we don’t waste time, but we also want what’s best for our clients.   We want them to know if there are any issues preventing them from getting a mortgage, so they can address those issues and buy a home later on down the road.   We want our clients to know how much home they can afford so they look at homes that are in their reach.   We want our clients to get the house they want.   And getting preapproved (or not) helps them with all of those things.

I hear a lot of realtors say they don’t touch new construction.   Some think mistakenly that they won’t get a commission.   Others truly consider the buyer and advise them it would be harder for resale in the next few years.

I think there’s no one answer if new construction is good or bad.   I don’t think there’s any one answer about what the best home or best neighborhood is.   If that were the case, we’d all be fighting to buy the exact same house in the exact same neighborhood.

“Best” is truly subjective.   It depends on each individual buyers circumstances.   What’s important to the buyer?   What do they want in a home?   What do they want in a community?   What are there preferences as far as lot sizes, home sizes, interiors, exteriors, amenitie both within the home and in the neighborhood?   All these make the determination of “best” different for all of us.

New construction has a lot of benefits.   Buyers can build a home from scratch exactly how they want it.   Buyers can build one that is nearly completed and pick their fixtures and colors.   I checked on my house every step of the way and had contractors (not working for the builder) evaluate the progress with me.   I have a solidly built, brand new house and have eliminated a lot of maintenance concerns by doing so. Buyers can buy a brand new home that’s already completed for less than an existing home in the neighborhood.   Read the rest of this entry »

to have been excerpted on the Realtor.com/blogs TWICE in the last week!

I just started blogging, and didn’t think anyone was reading.   I’m so glad that my peers think I have something valid to say.   Yes, I am a realtor to serve my clients, but I have always been as diplomatic, professional and ethical as could be to my fellow agents.   I think there is a lot realtors can learn from each other, especially in this market that seems to be advancing and changing daily.   I’m glad I was able to contribute to our community.

Here are the links to the posts:   Showing Appointments vs Open Houses

Foreclosures are not the only great deals in real estate