Monday, April 21, 2008

"We're Worth It... Now More Than Ever"

I'll be the first to admit it... We're just like you and your profession... a group who fits nicely under a "Bell Curve" (Normal Frequency Distribution for you statisticians out there). Some of us are "exceptionally good"... with loads of experience, education, technological profiiciency, and customers happy to refer us to their friends... really able to consistently deliver the "Wow!" factor. Many are "average," that's not a bad thing, in that they get the job done and meet acceptable standards. Some, sadly, are "not very good"... and they give the rest of us a bad name. Just like doctors, lawyers, teachers, nurses, mechanics, pastors, builders... and any other profession or service you can name. Right now, the real estate world is upside-down and there are some things you should know:
  • Many sellers are angry or confused... or both. Their sense of entitlement is overwhelming, as they firmly believe that the value of their home cannot - EVER - go down... "because this is America!" Nearly every consultation with a seller begins with, "We're not going to give our house away." In this market, having a realistic seller is akin to having a bucket of gold.
  • There are really THREE (3) MLS databases:
  • The first is called "Fantasyland." This is where the above-referenced sellers have their homes listed at "pre-2006" prices. They are hoping and praying and playing ostrich. They haven't read the paper...
  • Secondly, there are the "Short Sale" listings. This is where folks go who are trying to avoid foreclosure. Investors go here too, because they think it's a "get out of jail free" database. They don't understand that banks are in the business of making money and are exceedingly reluctant to let people off the hook... who have other assets! Today, "short sale" listings have become a catch-all of teaser prices. WARNING: If you get involved as an agent or a buyer here, do your homework and be prepared to wait a long time (90-120 days) for an answer. HINT: The answer is often, "No." In order to end up with a successful closing, list prices should be about 10% below market - to prompt offers. Offers, on the other hand should be close to market, in order to elicit a positive response from the bank. Regarding price? Make sure the relationship between your offer and the mortgage payoff amount makes sense. The bank won't take "$150,000... on a house appraised at $275,000... with a payoff of $350,000."
  • The third database is where motivated sellers (Harry and Mary Homeowner, Banks, REOs) are listed and are ready to do business... today.Today, there are 10,809 "Sold" properties in our database, from the past 36 months. Of these, there are 77 short sales. That's about six tenths of 1% of the database. Hardly a panacea for great deals.
  • Just because it says "foreclosure" or "REO bank-owned," does not automatically qualify them for Investor Nirvana. Look at all your options, as there may be Mom & Pop sellers who are highly motivated too.
  • Because you peruse the Internet sites and see lots of homes for sale, does not mean you "know the market." If I go to a medical web site and look at photos and read all about knee replacement surgery, I'm still not an orthopaedic surgeon. This is a tough business sometimes... and we are fully immersed. There is an amazing amount of "turmoil" under the surface of a real estate transaction. With 22 years of real estate sales and training agents and sales management, personal investing, constant reading and personal education... along with chairing our Arbitration Committee and conducting mediation of real estate related disputes... I (and others like me) can really help you make good decisions.

This market won't last forever, Thank God. There are plenty of signs that initial recovery has started. We are really busy! It's not like 1999-2005... and it's not a lot of Waterfront, Canals, and Hammock Beach, but we are busy. Why? Because those that missed the boat last time around, don't want to miss it again. As the lower end clears out, the funnel will flow more freely for the rest of the market. Hallelujah!

Tuesday, April 8, 2008

"I Guess We Made Him Mad"

...Well, well, well. It's all clear to me now!
The real estate market has been in a mess for nearly three years now. We all have theories, as to "why." I'm really good at those, you know... You could look it up. But 90% of the statistics, as presented by 72% of all economists, contain 37% flawed data, 65% of the time. You could look that up too.
So, quite a long time ago, it seems that God was displeased with His people's performance here on earth. It rained for 40 days and 40 nights in a display of torrential might. Everything was lost, save for Noah and the inhabitants of the Ark. As I looked at the sky (see photo above) I couldn't help but see the significance of the imagery. We've made Him mad again. There is no other earthly explanation for the cloud formation and/or this real estate market.
But Good News! When the rains subsided, Noah and the survivors enjoyed a new beginning - a clean sheet of parchment - a chance to start over. I'm sensing that is so in the real estate market right now. I can't tell you how busy we've been the past month or so. It's mainly in the lower price ranges (under $200,000), as those who missed the last opportunity to become homeowners, are coming out of their slumber. Prices and interest rates are low. There are lots of motivated sellers and bank foreclosures. The paper is full of bad news, but then again, it always is. There is plenty to indicate we're either at... or very close to... "the bottom." Things are moving, as the force of pent up demand gains momentum. Like my buddy John just said, "The bad market will be over, when the people decide it's over." It's a great time to buy... Don't wait, or you may be singing the "I Cain't Bul'eeve I Missed The Freakin' Boat A'gin" Blues :-)

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