We Find Agents blog

Tips on Buying a Short Sale

Wed, 29 Apr 2009 15:48:00 -0500

How Long Could it Possibly Take?...-Tips on Buying a Short Sale

What is a short-sale? A short-sale occurs when a homeowner realizes they won’t be able to afford their mortgage payments but still wants to salvage their credit by avoiding foreclosure. If you sell your house through a short-sale, with proper credit repair you should be able to purchase another home in 2 – 3 years. If you allow the home to go into foreclosure, your next purchase may be up to 7 years away.

A short-sale occurs AFTER an owner goes into default on their payments and BEFORE the house goes up for auction. If the owner can find a buyer, the lender may allow the sale and forgive a portion of the debt if it makes financial sense for them to do so. The lender stands to lose a great deal of money if they have to foreclose, so a short-sale is usually in both the lender’s and the homeowner’s best interests.

Approaching a short-sale as a buyer can be somewhat tenuous. There are many pitfalls in the process, and you could be waiting anywhere between one and six months before you’re even in Escrow. When buying a short-sale, it’s important to understand the most common problems buyers face and how these problems can be minimized or averted altogether.

To understand the problems associated with a short-sale, first you need to have a basic understanding of the process. Once a seller begins to miss payments on their loan, they may list their home with a REALTOR as a short-sale. This doesn’t mean that the lender has agreed to the sale. Before the lender will even consider the short-sale, they first must be presented with a valid offer. Because they need an offer to even start the process with the lender, listing agents will typically price short-sales 5 – 10% below market value to generate a great deal of interest and to quickly entice multiple offers. Once an offer is in hand the listing agent will send the offer, an estimated closing statement, and the short-sale package (which has to clearly demonstrate the seller’s inability to make their payments) to the lender for review. From there, the lender will assign a negotiator to handle the transaction. The negotiator will then order an appraisal for the property and help the institutions involved (first lien-holders, second lien-holders, mortgage insurers) come to an acceptable pay-off agreement. At this point, the lender will choose to either accept the offer as-is, or counter with their bottom line figure. In other words, as a buyer, you don’t know what price you’re getting for the house for at least a month (and often longer).

Now that you understand the short-sale process, here are some tricks you can use to make buying a short-sale a lot easier:

1. Make sure there is only one lender. Also, try to avoid a short-sale that involves a mortgage insurance company. The more financial institutions involved in the negotiations, the longer the process will take and the higher the price you’ll eventually pay. The listing agent should be able to tell your REALTOR how many lenders have an interest in the property, and they might even be able to tell you if their client had mortgage insurance as well.

2. Hire a professional short-sale negotiator. If the listing agent doesn’t have a short-sale negotiator that they regularly use, have your agent write it into the contract. Professional negotiators maximize your odds of completing the sale in a reasonable time for a reasonable price. They negotiate short-sales for a living, and they’re not working on behalf of the lender.

3. Make sure the listing agent agrees to submit your offer and put all others in backup position. Until the bank approves the short-sale nothing is official. If a better offer comes in after yours, the listing agent may choose whether or not to submit that offer to the lender. If you’re going to write an offer on a short-sale, get the listing agent’s word that your offer will be the only one submitted to the lender and that all others will be held by the listing agent in back-up position. The last thing you want is to be in a drawn out bidding war that could last months.

4. Keep the offer simple. Don’t complicate your offer by asking for XY and Z. You know the seller doesn’t have the financial means to pay for anything, and the simpler you make your offer the easier it will be for the lender to break it down financially. Volunteer to take care of the termite clearance yourself. Don’t ask for repairs. If you want a Home Warranty, pay for it yourself. If you’re asking for a closing cost credit, make it a dollar amount instead of a percentage. The easier your offer is to understand, the quicker the lender will respond.

5. Finally, stay patient. Short-sales take a long time and it’s easy to get restless. As long as you’ve followed rules 1 through 4, you should have about an 80% chance of completing the sale (yes, that’s very high for a short-sale). If you’re satisfied with the house, satisfied with the price, and you’re guaranteed to be the only offer, you’re sitting pretty. Ride it out and hope for the best.

The Steps in the Home Buying Process

Thu, 16 Apr 2009 10:00:00 -0500

Right Foot, Left Foot, Right Foot...-Marching Toward Your Goal: The Steps in the Buying Process

Before I get going about the steps in the buying process, I’d like to provide you with a brief disclaimer. Every state is different. There are different regulations, norms, fees, entities, etc. I’m extremely familiar with the process in California, but if you live outside of California some of these steps may be inaccurate. However, regardless of where you live, this article should provide you with good information, a quality foundation, and reasonable expectations. Also, feel free to show your agent this article and ask what’s different in your State.

Step 1: Hire a Loan Officer
I touched on this in my entry What’s My Rate. Your first step in the buying process should always be to interview and hire a loan officer. Your loan officer will provide you with a max pricepoint to help you with your search. You don’t want to search for homes out of your price range, because after you do you’ll likely be disappointed with everything you find within your budget. Also, you don’t want to find your dream house and lose out on the bidding because another buyer had a pre-approval letter and you didn’t.

Step 2: Hire a REALTOR . . .
And what’s the best way to hire your REALTOR? Simply go to www.WeFindAgents.com and complete the quick application. We Find Agents is a REALTOR head hunting service with a client-first approach to agent selection. If you’re reading this on another site and haven’t already visited the We Find Agents, take 5 minutes and read through the content. Our overall attitude and philosophy will blow you away.

Step 3: Find a House
When you first meet with your agent you need to accomplish two things. First, let him know your maximum pricepoint. Second, make a list of needs (what you absolutely must have and can’t live without) and wants (features you’d like to see if possible). If your agent isn’t finding many properties that fit your criteria you’ll need to move one of your “needs” into the “wants” column. On the other hand, if you’re search is producing too many results, you might want to make your search a little more specific. Finally, when you go touring with your agent try to keep an open mind and an active imagination. Ignore the paint, carpet, and furnishings and try to picture each house as you would decorate it.

Step 4: Negotiate the Purchase
I’ve touched on this in my previous post Managing Negotiations. First, do what you can to find out the negotiating style of the seller and match it. If they’re negotiators, start low. If they’re not negotiators, a lowball offer could be seen as offensive. In this instance, make your offer competitive. Most importantly, remember that REALTORS negotiate for a living. Tell your agent what you’d like to accomplish and then trust his advice.

Step 5: Deliver the Good Faith Deposit
A good faith deposit is usually between one and three percent of the purchase price. It shows the seller that you’re committed to the purchase, and it gives the seller recourse should you breach the contract. As long as you follow the terms agreed to in your purchase contract your deposit will be safe. Should you breach the contract, the seller may be entitled to this deposit. The lesson here is this: read the contract and make sure you understand your timelines and responsibilities.

Step 6: Complete the Escrow Paperwork
Once the good faith deposit is delivered to Escrow, your Escrow Officer will draft and mail out your Escrow packet. This is going to include the Escrow Instructions, Commission Instructions (for sellers only), Wiring Instructions, and various forms that you need to complete and return. Make sure you complete and return the packet promptly. If you have any questions, don’t be ashamed to ask your Escrow Officer, Loan Officer, or your REALTOR.

Step 7: Review the Preliminary Title Report
The Preliminary Title Report serves two purposes. First, it helps to uncover any recorded documents affecting the property (liens, easements, restrictions, etc.) Read through the Prelim carefully. Your Title Insurer will provide you with any recorded documents you ask for, so if you want more information make sure to ask your agent. Second, the Prelim acts as a commitment from the Title Insurer to provide a new policy of Title Insurance at closing. If you’re getting a loan, Title Insurance will be required by your lender.

Step 8: Obtain Hazard Insurance
Your lender requires that you obtain a policy of hazard insurance to help protect their investment. It’s your responsibility to shop insurance companies and select an insurance policy. Once you’ve done this, provide your insurance agent with the contact information of your Loan Officer and Escrow Officer and they’ll help you take care of the rest.

Step 8: Inspect the House
Inspecting the house is your responsibility . . . not the seller’s and not your agent’s. First you’re going to hire a General Inspector. A General Inspector is typically a jack-of-all-trades but a master of none. He’ll help you by pointing out red flags, and he’ll recommend further inspection if necessary. Take care of the general inspection quickly so you leave yourself time to order additional inspections and negotiate repairs. Most importantly, if there is anything you’re uncertain about get it inspected by a specialist. Remember, $100 for a roofer now is better than $10,000 for a roof later.

Step 9: Repair Negotiations
Now that you’ve completed your inspections, it’s time to decide whether or not you’re going to ask for any repairs. The repair request is for items discovered by your inspector and unknown to you and your agent at the time you made your offer. This includes problems with the foundation, roof, plumbing, electrical work, etc. The seller is not required to complete any repairs, but they might agree to all or part of your request to keep you in the transaction.

Step 10: The Appraisal
The appraisal will be ordered by either your loan officer or your lender. The job of the Appraiser is to analyze the comps and determine an accurate value for the home you’re buying. The purpose of the appraisal is to ensure that your lender will be able to recuperate their investment in the event of foreclosure. The only way your appraisal can cause a problem is if the appraised value comes in lower then the purchase price. Should this happen, you’ll have to either 1) lower the loan amount and increase your down payment, 2) renegotiate the sales price with the seller, or 3) back out of the purchase.

Step 11: Loan Approval
Once the lender is satisfied with you as a borrower and the value and insurability of your purchase, they’ll issue you a “prior-to-docs” loan approval. Once you have this approval, the odds that you’re going to have any problems funding your loan drop significantly. While your loan still isn’t 100% guaranteed, you can feel confident moving forward with your purchase.

Step 12: Contingency Removal
This is the most stressful step in the buying process. When you remove your contingencies you’re placing your initial deposit at risk. If your loan fails to fund or if you change your mind and back out of the purchase the seller will be entitled to the deposited funds. Before you remove your contingencies, first make sure you’re satisfied with the condition of the property and that you’re content with completing the sale. Also, find out if the appraisal has come in at value (or higher) and if your lender has accepted the appraisal. Finally, confirm with your loan officer that your loan has been approved. Once you’ve done those three things, you shouldn’t have any problem removing your contingencies.

Step 13: Doc Signing
Doc signing is where you formalize the purchase and the terms of the loan in front of a notary. Lenders and Escrow Officers do occasionally make mistakes, so read through everything before you sign. If you have any questions, call your Loan Officer, Escrow Officer, or REALTOR immediately.

Step 14: Funding/Recording
Once the Loan Docs have been processed and reviewed by your lender, your loan will be set up for funding. Once the loan has funded, the deed will be sent to the County to be recorded. As soon as the deed has been recorded you’ll receive a phone call with confirmation that the house is finally yours.

How to Spot a Bad Agent

Mon, 30 Mar 2009 14:26:00 -0500

You’ve Been Doing This for How Long? - How to Spot a Bad Agent

There are clearly two ways I could go with this entry. I could either highlight all the positive aspects of good REALTORS, or I could go negative and illustrate the many faults of bad REALTORS. Frankly, with where we are as a country right now, I’d much rather focus on the positive side of the business. In this article I’ll be talking about the positive aspects of good REALTORS. If you want to know how to spot a bad REALTOR, you can probably just apply the opposite to most of these items.

Keep in mind that this isn’t meant to be a checklist of every quality and action your agent must meet in order for you to hire them. Instead, use these simply as an indicator when evaluating an agent. The more criteria your agent meets, the better he’ll probably be.

While I think I’ve put together a pretty comprehensive list, I’d love some additional feedback from you. If you have had a positive or negative experience with a REALTOR, please leave a comment and tell us about it.

A good REALTOR:
1.   Won’t show you property until you’ve been pre-qualified by a loan professional.
2.   Won’t list your house for an unrealistic price.
3.   Won’t show you homes out of your price range.
4.   Won’t discount their commission upfront.
5.   Treats his Real Estate Practice like a business.
6.   Sets boundaries with his clients.
7.   Returns calls quickly.
8.   Is always on time.
9.   Talks from experience, not conjecture.
10.   Has personal relationships with other agents.
11.   Understands financing.
12.   Quickly navigates contracts and completes them correctly.
13.   Can easily and clearly explain elements of contracts to you without using jargon.
14.   Can clearly demonstrate value.
15.   Is tech savvy.
16.   Listens to you.
17.   Learns from past experiences with you and adjusts his actions accordingly.
18.   Reciprocates your preferred communication style (phone calls, e-mails, texts)
19.   Over-communicates with you.
20.   Knows when homes were built in a given neighborhood.
21.   Can spot original features in homes.
22.   Knows common problems in a given neighborhood (slab problems, common construction defects for the area, environmental hazards, noise issues, etc.)
23.   Doesn’t get lost.
24.   Can talk about marketing and sales trends in your area.
25.   Knows the comps inside and out.
26.   Knows the schools.

Hiring a Loan Officer

Fri, 13 Mar 2009 11:00:00 -0500

What’s My Rate?-Tips on How to Hire a Loan Officer

Maybe it’s time to buy your first home. Maybe you want to purchase a rental property. Maybe it’s time to upgrade from your current house. Regardless of the reason, it sounds like you’re going to be buying a house in the next year. Resist your urge to immediately call a REALTOR. Resist your urge to go out touring open houses on the weekends. Resist the urge to go online and look at homes for sale. Before you do any of those things you first need to hire a Loan Officer and get pre-approved.

Why do you need to hire a Loan Officer before you do anything else? For starters, when you hire your agent he is going to want an accurate price range to work with. This range is going to help your agent refine his search and show you the best possible homes within your budget. Also, you don’t want your REALTOR showing you homes you really can’t afford. If you get your heart set on something you can’t afford you’ll either 1) never find a house that lives up to your new standards, or 2) end up buying something that you’re not entirely satisfied with. Finally, when you find a house you like you’re going to want to be able to act immediately. Having a pre-approval from a lender will strengthen any offer you make and increase your chances of getting an acceptance.

You now know that you need to find a Loan Officer, but how should you go about hiring one? If you’ve worked with someone in the past that you respect and trust, give them a call. They’ll appreciate the repeat business and they’ll probably give you a discount off their regular fees (especially if you’ve been referring business to them). If you’re not sure who to call, or if you’ve had a bad experience in the past with your Loan Officer, give me a call. Not only will I provide you with the contact information of some top Loan Officers with gobs of experience, I’ll also call them on your behalf to make certain they give you a discount and make you their highest priority.

If there is one thing I want you to take away from this article it’s this: RATES ARE RATES.

Good Loan Officers have access to the same lenders and the same rates as everyone else, so trying to find the Loan Officer with the best rates is like hiring a driver who has access to the best roads. I know it’s a silly analogy, but it works. Interest rates change two to three times a day, so if you interview Loan Officers over two days based solely on the rate they can deliver, then you’re going to get one of the following:

1. The luckiest Loan Officer of the group whom you called when rates were lowest,
2. The Loan Officer with the highest fees, or
3. The Loan Officer who lied to you about the rate they could deliver.

When you interview a Loan Officer, don’t make it an inquisition . . . have a conversation with them. Find out about their experience, ask how many lenders they have access to, ask about the state of the lending market (trends, changes, regulations, etc.) Ask them how many loans they close each month. Try to get a sense of their intelligence, integrity, and ability. When it’s time to make your decision, know that your best rate and fee structure will come from a knowledgeable, trustworthy Loan Officer with a steady flow of business.

Before I finish, I’d like to leave you with one more thought. Once you’ve selected to your Loan Officer, don’t shop around. From the second you start working with your Loan Officer, they’ll be spending time and money on you without any compensation until your purchase closes. In addition, their processor, their account executives, and their underwriters will be expending a good amount of effort on your behalf that you’ll probably never be aware of. I’m not saying that you should stick with a Loan Officer that is rude, untrustworthy or unresponsive—just don’t look around for another Loan Officer unless you have significant cause to do so.

Relocating Families

Tue, 10 Mar 2009 17:24:00 -0500

Relocating Families - The Best Cities Where Families & Careers Grow Together

Relocation can be a trying time for any family, even under the best of circumstances. So with the culmination of independent research data (Primacy, WorldWide ERC & Bert Sperling), We Find Agents brings you the "Best Cities for Relocating Families". With a focus on a new life in a new city, we want to make sure you and your family settle with ease. Using 150+ of the most populous cities and encompassing more than 50 deciding factors that are important to relocating families, this report provides one convenient resource for detailed information.

This 2007 report puts increased emphasis on the real estate market, which is currently one of the most significant issues in relocation. Key criteria include:
• Home prices
• Indexed home affordability
• Appreciation rates
• Property taxes
• Rent costs
• etc...

The data combined here continues to enhance and expand analysis of economic, educational, quality of life, and climate factors related to Family Relocation. New categories for 2007 include recreation and leisure, arts and culture, air quality, watershed quality, sales tax, unemployment rates, job growth, area educational levels, school expenditures per student, students in public school, SAT/ACT percentile, and population growth.

The final rankings represent one of the most sophisticated comparative research studies available on how location affects a family’s relocation success.

Large Markets

(Metro Areas with Populations Over 1,250,000)

Rankings: 1-50

1. Fort Worth-Arlington, TX
2. Nashville-Davidson-Murfreesboro, TN
3. Kansas City, MO-KS
4. Indianapolis-Carmel, IN
5. Austin-Round Rock, TX
6. Pittsburgh, PA
7. Minneapolis-St. Paul-Bloomington, MN-WI
8. Cambridge-Newton-Framingham, MA
9. St. Louis, MO-IL
10. Cincinnati-Middletown, OH-KY-IN
11. Columbus, OH
12. San Antonio, TX
13. Dallas-Plano-Irving, TX
14. Detroit-Livonia-Dearborn, MI
15. Virginia Beach-Norfolk-Newport News, VA-NC
16. Atlanta-Sandy Springs-Marietta, GA
17. Phoenix-Mesa-Scottsdale, AZ
18. Houston-Sugar Land-Baytown, TX
19. Memphis, TN-MS-AR
20. Charlotte-Gastonia-Concord, NC-SC
21. Denver-Aurora, CO
22. Cleveland-Elyria-Mentor, OH
23. Warren-Troy-Farmington Hills, MI
24. Portland-Vancouver-Beaverton, OR-WA
25. New Orleans-Metairie-Kenner, LA
26. Las Vegas-Paradise, NV
27. San Francisco-San Mateo-Redwood City, CA
28. Boston-Quincy, MA
29. San Jose-Sunnyvale-Santa Clara, CA
30. Tampa-St. Petersburg-Clearwater, FL
31. Seattle-Bellevue-Everett, WA
32. Edison, NJ
33. Santa Ana-Anaheim-Irvine, CA
34. Milwaukee-Waukesha-West Allis, WI
35. Nassau-Suffolk, NY
36. Orlando-Kissimmee, FL
37. San Diego-Carlsbad-San Marcos, CA
38. Washington-Arlington-Alexandria,DC-VA-MD-WV
39. Oakland-Fremont-Hayward, CA
40. Sacramento-Arden-Arcade-Roseville, CA
41. Baltimore-Towson, MD
42. Newark-Union, NJ-PA
43. Riverside-San Bernardino-Ontario, CA
44. Providence-New Bedford-Fall River, RI-MA
45. Los Angeles-Long Beach-Glendale, CA
46. Philadelphia, PA
47. Fort Lauderdale-Pompano Beach-Deerfield, FL
48. Chicago-Naperville-Joliet, IL
49. New York-White Plains-Wayne, NY-NJ
50. Miami-Miami Beach-Kendall, FL

Medium Markets

(Metro Areas with Populations From 575,000 - 1,250,000)

Rankings: 1-50

1. Knoxville, TN
2. Wichita, KS
3. Raleigh-Cary, NC
4. Salt Lake City, UT
5. Oklahoma City, OK
6. Richmond, VA
7. El Paso, TX
8. Little Rock-North Little Rock, AR
9. McAllen-Edinburg-Mission, TX
10. Tulsa, OK
11. Greensboro-High Point, NC
12. Columbia, SC
13. Omaha-Council Bluffs, NE-IA
14. Tucson, AZ
15. Birmingham-Hoover, AL
16. Syracuse, NY
17. Buffalo-Niagara Falls, NY
18. Rochester, NY
19. New Haven-Milford, CT
20. Albuquerque, NM
21. Bethesda-Gaithersburg-Frederick, MD
22. Greenville, SC
23. Tacoma, WA
24. Oxnard-Thousand Oaks-Ventura, CA
25. Camden, NJ
26. Akron, OH
27. Youngstown-Warren-Boardman, OH-PA
28. Louisville-Jefferson County, KY-IN
29. Essex County, MA
30. Dayton, OH
31. Lake County-Kenosha County, IL-WI
32. Sarasota-Bradenton-Venice, FL
33. Springfield, MA
34. Baton Rouge, LA
35. Wilmington, DE-MD-NJ
36. Grand Rapids-Wyoming, MI
37. Hartford-West Hartford-East Hartford, CT
38. Albany-Schenectady-Troy, NY
39. Jacksonville, FL
40. Worcester, MA
41. Gary, IN
42. Bridgeport-Stamford-Norwalk, CT
43. Toledo, OH
44. Honolulu, HI
45. Bakersfield, CA
46. Allentown-Bethlehem-Easton, PA-NJ
47. West Palm Beach-Boca Raton-Boynton Beach, FL
48. Fresno, CA
49. Poughkeepsie-Newburgh-Middletown, NY
50. Stockton, CA

Small Markets

(Metro Areas with Populations From 350,000 - 575,000)

Rankings: 1-50

1. Provo-Orem, UT
2. Ogden-Clearfield, UT
3. Durham, NC
4. Colorado Springs, CO
5. Corpus Christi, TX
6. Madison, WI
7. Shreveport-Bossier City, LA
8. Des Moines-West Des Moines, IA
9. Spokane, WA
10. Rockingham County-Strafford County, NH
11. Springfield, MO
12. Winston-Salem, NC
13. Augusta-Richmond County, GA-SC
14. Boise City-Nampa, ID
15. Mobile, AL
16. Fayetteville-Springdale-Rogers, AR-MO
17. Beaumont-Port Arthur, TX
18. Fort Wayne, IN
19. Jackson, MS
20. Davenport-Moline-Rock Island, IA-IL
21. Trenton-Ewing, NJ
22. Vallejo-Fairfield, CA
23. Asheville, NC
24. Cape Coral-Fort Myers, FL
25. Santa Barbara-Santa Maria, CA
26. Charleston-North Charleston, SC
27. Manchester-Nashua, NH
28. Lexington-Fayette, KY
29. Brownsville-Harlingen, TX
30. Santa Rosa-Petaluma, CA
31. Harrisburg-Carlisle, PA
32. Deltona-Daytona Beach-Ormond Beach, FL
33. Peoria, IL
34. Pensacola-Ferry Pass-Brent, FL
35. Chattanooga, TN-GA
36. Lansing-East Lansing, MI
37. Portland-South Portland-Biddeford, ME
38. Palm Bay-Melbourne-Titusville, FL
39. Reno-Sparks, NV
40. Lakeland, FL
41. Salinas, CA
42. Salem, OR
43. Canton-Massillon, OH
44. Flint, MI
45. Visalia-Porterville, CA
46. Lancaster, PA
47. Modesto, CA
48. Scranton-Wilkes-Barre, PA
49. Reading, PA
50. York-Hanover, PA

Getting Out and Getting Going

Tue, 10 Feb 2009 16:11:00 -0600

Getting Out and Getting Going - How to Sell Your House in a Down Market

Imagine this scenario. You’ve decided to sell your house. You go out one morning to get the paper and you look down your street. To the left you see a “For Sale: Foreclosure” sign. To the right you see a sign that reads: “For Sale: Short-Sale.” You open up the paper and see the headline: “Existing Home Sales Continue Slide.” Congratulations! You’re selling in a down market.

Despite what you may have heard, selling in a down market is not impossible . . . you just have to put your pride aside and be a little creative with your marketing.

To understand how you should market your home, first you need to understand the competition you’ll be facing. A down market means that there is a lot more supply than there is demand (a lot more sellers than buyers). Homes sit on the market longer and buyers typically dictate the negotiations. The market is also likely flooded with short-sales and foreclosures. These two types of sellers usually employ a loss-leader pricing strategy. The loss-leader strategy involves listing a house 5 – 10 percent under market value. While they have little intention of selling the house for that price, the lower list price generates a flurry of showings and often brings in multiple offers within the first week. Their hope is that a bidding war will ensue and the final sales price will be close to market value (again, usually 5 – 10 percent over the list price). Meanwhile, sellers who decide to employ a more traditional sales strategy are left with few showings, lowball offers, and long listing times.

Something else you need to consider when selling in a down market is the loss you’re incurring on a monthly basis by holding out for your ideal price. Ask your agent to put together a detailed one year market history for your specific market. From that analysis, calculate the equity you’ll be losing on a monthly basis by staying in your house. Add that to your mortgage payment, taxes, and insurance. This sum is your true monthly cost of staying in your house.

Based on the recent sales prices in your area, work with your agent to determine a fair market value for your home. Then, look at the active listings that are similar to yours in size, quality and location and figure out a listing price that stands out from your competition. Depending on your area and the number of active listings—especially foreclosures and short sales—your listing price could be anywhere between 90 and 100 percent of your estimated market value.

Your goal is to fuel a buyer’s blitz on your home and to be in Escrow within the first 2 weeks. Preparation is everything. Don’t let your agent take your listing active until you’re both fully prepared to hit the ground running. Most showings occur on the weekend, and most REALTORS plan their tours on Thursday or Friday, so you’re going to want to take your listing active on a Wednesday. After you go active, have your agent post the listing on Craig’s List two or three times daily. He should also hold open houses on both Saturday and Sunday, and make sure you ask him to host a Broker’s Caravan to generate interest in the agent community. Additionally, have him immediately send out one or two e-blasts to the agent community advertising your home, the open houses, and the caravan. This is a lot of marketing, but it’s inexpensive and your agent shouldn’t have any problem taking care of it for you (especially when you agree to list your home under market value).

There are also a couple of things YOU can do to help your own cause. First, walk your neighborhood and pass out fliers about the sale and the open houses. Your neighbors should be motivated to help you. In case they aren’t, make sure you mention that your ultimate sales price affects the value of their home. Also mention that they have the opportunity to choose their new neighbors instead of putting it up to chance. Believe me, if the price is attractive they’ll be telling all their friends. Second, send an e-mail to all your friends, co-workers, associates, etc. The first goal of any marketing plan is to generate awareness, so don’t be afraid to tell people that you’re selling your house.

The purpose of this strategy is to generate multiple offers, create a bidding war, and drive the price point up to market value. But what do you do if the offers you receive don’t come up to your desired pricepoint? I would never advise you to take a lowball offer, but if you get an offer within 5% of your estimated value in a declining market, YOU MUST TAKE IT. Here is the nightmare scenario you’re trying to avoid:

You list your house at market value. For argument’s sake, let’s say let’s say you’re living in San Diego at the beginning of 2008 and your home is worth $500,000. You have a decent amount of showings at the beginning and you get an offer. You negotiate with the buyer and he finally gives you a final counter at $475,000 (5% below your estimated value). You reject the offer. February comes around and your house is now worth $490,000. You get another offer, this time ending at $465,000 (again, 5% below your estimated value). You reject the offer. This process continues, and at the end of the year you’re still living in your home, now worth $380,000.

In a down market, buyers are always looking for deals. On principle alone they’re not going to come up to full market value. If you’re going to sell your house during a downswing you need to be leading the market, not trailing behind it. Your ego is going to be your greatest enemy . . . don’t let it cost you.

Relocation Tips

Fri, 30 Jan 2009 16:32:00 -0600

New City...No Problem - Tips for when you need to relocate

Relocating to another city can be hard, especially when you’re on a time crunch. The logistics get even tougher when real estate is involved. How are you supposed to buy a house in another city when you’re not even there yet? If you own a house already, what do you do with it? Is renting an option? Because this process can get complicated, it’s important to know your options.

If you already own a house and you plan to sell, you have 3 legitimate options (if you don’t currently own a home, feel free to skip down to paragraph 4). First, you can negotiate a contingent purchase. A contingent purchase means that in order for your purchase to go through, you need to first sell your house. This way, you lock down the house you like and allow yourself the time you need to sell your current home. Unfortunately, many sellers are unwilling to accept contingent offers (especially short-sales and foreclosures).

Should you encounter a seller that won’t accept a contingent offer, utilizing a swing loan may be necessary. Swing loans provide you with short-term financing based on your ability to repay the debt quickly. They carry a high interest rate and are not meant to be long term solutions. However, if you expect to sell your house in the next 6 months, a swing loan can give you the short-term leverage you need to buy now.

If you’re not comfortable with those two options or if you can’t find a house you like before you have to move, corporate housing is your best option. Corporate housing is short-term, furnished rental property. It will provide you with the comforts of home while not tying you down to a long term lease that could prevent you from buying in the near future. Corporate housing is more expensive than regular rentals, so use this only as a stopgap.

Now that we’ve covered the logistics of moving, let’s discuss the housing search. First, talk with your Loan Officer about your financing options. Loan guidelines change all the time, so discussing the state of the loan market and how it affects your upcoming move is important. Your Loan Officer will also be able to give you an accurate price range so your REALTOR knows where to draw the line.

Next, hire your agent and have a candid discussion about your needs, your wants, and your personal preferences. Based on his discussion with you and your target price range, your agent should be able to narrow your search to 5 – 10 specific areas.

Once you’ve narrowed down your search, it’s time to spend a weekend getting to know the area. Find a weekend when both you and your agent are free and have him plan out a detailed tour for all of your target areas. You’re going to want to see houses within your range, schools, parks, shopping centers, local attractions, etc. In other words, you’re going to want to get a feel for what life would be like living in that neighborhood. When the weekend is over, you should be able to narrow down your search even further (hopefully to 2 or 3 key areas).

By this time, based on your knowledge of the area, you should be able to look at photos and maps online and know whether or not a house is right for you. Your agent should also know your own personal style after spending a weekend with you. Have your agent preview homes for you and send you reports (with more detailed pictures and personal comments). If your agent finds one that he thinks is perfect for you, make a day trip out and see it for yourself.

Buying a home in an out of town area can be very difficult, but if you have the right agent who is willing to put in the work, it can be done. Most importantly, if you find a house you like, don’t hesitate to pull the trigger.

Managing Negotiations

Mon, 05 Jan 2009 12:04:00 -0600

Managing Negotiations - How to Maximize Your Return Without Blowing the Deal

Negotiations involve two key motivational factors: your desire to complete the transaction balanced against the financial impact. Both you and your counterpart on the other side of the negotiation want to complete the sale. Also, both you and your counterpart have an acceptable price point already in mind. The key to a successful negotiation is to keep both parties engaged long enough to find the middle ground between a buyer’s upper limit and a seller’s lower limit.

Emotions and assumptions are the most common reason why negotiations fall apart. Given enough time, a motivated buyer and a motivated seller can usually come to an acceptable pricepoint. Here are a couple tips to help you give yourself the best chance to realize your goal:

Recognize and Match The Negotiating Style of Your Counterpart
Some people love to negotiate. Others like to set a price and hold steady. A person’s negotiating style depends on their personality, culture, experiences, and profession. Both methods are an effective way to come to an agreement as long as both parties conform to one style or the other. When used against each other, however, a deal is much less likely to occur. The key is not to force your style on your counterpart, but instead to understand their style and match it.

Usually, your counterpart’s first bid will let you know their style, but what do you do if you’re the one making the offer? Instead of going in blind, have your agent find out the negotiating style of your counterpart from their agent. Once their negotiating style is known, set your target price and work with your agent to formulate an appropriate opening bid.

No one likes to deviate from their preferred negotiating style. Just remember, using a negotiating style that isn’t natural can be uncomfortable, but the improved results are worth a little discomfort.

Never Reject an Offer
Rejection leaves you little room to accomplish your goals. Rejections lead to hurt feelings and a sense of finality. Your counterpart may have eventually come to your price point, but with a rejection you’ll never know for sure.

If you’re selling your home, there is an additional bonus to maintaining negotiations. An ideal situation for a seller is to have multiple buyers bidding on your home. When this situation occurs, your buyers are no longer fighting against you . . . they’re fighting against each other (and essentially themselves in the process). If you have a quality offer, by all means take it. If you don’t, keep the negotiation alive and maybe you’ll get lucky and stumble into a multiple offer situation.

Find Common Ground
It is very common for both you and your counterpart to want more than each of you is willing to give. If it looks like you’re coming to an impasse, open up a dialogue with your counterpart and see if you can find some common ground. First, list the issues that are still undecided. Second, have both parties divide the list into two categories: needs and wants. Third, compare lists and iron out the details. The goal is for you and your counterpart to come to a mutually beneficial agreement, where each party gets what they truly need and sacrifices items they merely want. If you find an issue that both parties rate as a need, see what you can do to find a middle ground.

Talk From Your Wallet, Not From Your Heart
Your emotions will betray you. If you let your emotions take control of a negotiation, you’ll more than likely sabotage your own chances of success. The only things that should matter in a Real Estate negotiation are money, convenience, and the likelihood of closing. Additionally, every item in a Real Estate negotiation (including convenience and the likelihood of closing) can be broken down to a monetary figure.

When reviewing an offer from your counterpart, make a list of the items you’re unhappy with and work with your agent to attach a monetary value to those items. In your mind, adjust the purchase price by that value and you’ll know the overall financial impact of the offer. If you plan to write a counter offer, base it on your financial breakdown, not on how you feel at the time.

Whether you’re buying or selling, Real Estate transactions are always uncomfortable. Expect to be inconvenienced, put out, and offended at some point. When these situations occur, you will have the chance to become your own worst enemy. Don’t let this happen. Stay cool and keep your eyes focused on the endgame.

Should You Stretch Your Pricepoint when Buying a House

Fri, 12 Dec 2008 15:06:00 -0600

Should I or Shouldn’t I -When to Stretch Your Pricepoint

You’ve found a house, you’re engaged in negotiations, and the seller is standing firm at a pricepoint beyond your comfort level. Do you stretch your pricepoint and guarantee yourself the house or stand firm and risk loosing it? This is a very common problem, and I want to give you some things to think about if you’re ever faced with this tough decision.

1. Do you have job security? Are you expecting an increase in income or a decrease in debt over the next five years? If the answer to each of these questions is “yes” then stretching your pricepoint now won’t be much of a financial risk. If the answer to either question is no, you probably want to stand firm.

2. Is this house truly unique? If you haven’t been finding many homes that you like, or if this house has a special feature that you want and can’t find elsewhere, stretching may be worthwhile. However, if there are many similar homes for sale in the area, you’re likely to find one that is willing to accept your pricepoint.

3. Will you have enough money to make any necessary alterations after closing? If the house is pristine and there isn’t anything you would change, it might be a good opportunity to move up your pricepoint. However, if you’re looking to make any additions or alterations, you need to make sure you leave yourself with the necessary financial resources. No one wants to live in a fixer they can’t afford to fix!

4. Are prices in your target market increasing or decreasing? Don’t listen to general news broadcasts about market trends. Also, don’t take broad information about an entire zip code when making a decision. Ask your agent to provide you with a detailed 6-month market analysis for the specific market in which you’re looking to buy. If prices are holding steady or increasing, you may be running out of time to snag the quality of house you’re looking for. However, if prices are decreasing it may be prudent to wait 6 months until the market drops down within your budget.

5. Where are loan rates? Talk with your loan officer to determine current rates and the security of the loan program you’re looking to use. If rates are low, this could be a good time to extend yourself. Also, if your loan officer doesn’t know whether or not the loan program you need will be around in 6 months, now may be a good time to buy.

Introduction to We Find Agents

Tue, 18 Nov 2008 11:55:00 -0600

Welcome! I'm so happy to finally have this website up and running. This referral service has been something I've wanted to provide for some time now, and my web design team did an amazing job to help me realize my vision.

Because this is just my first blog entry, I'd like to take the time to give you an overview of my vision for this website and for this blog. When I was just getting started in Real Estate, my mentor Debbi gave me an incredible piece of advice that I still value to this day. She said "Plug away. Always focus on doing everything you can to serve the needs of your clients. Do that, and money will never be an issue." This advice is the foundation of what I'm trying to accomplish with We Find Agents.

Some sites forward your information and wait for a check when you close. Other sites flat-out sell your information to any agent willing to pay. None that I've found work with you through the interview process, the waiting game, Escrow, and closing. We Find Agents is a consumer first, client driven referral service. I take your specific needs to heart and work diligently to narrow down the immense field and find you the best agents to fit your unique needs. I'll set up the interviews and help you come to a decision. I'll also stay with you through closing and help you work through any problems that arise along the way. Most importantly, I get paid by your agent once you've closed Escrow--never by you and never prior to closing. This blog is meant to be a high-quality resource for you to utilize. I'll discuss general information, current events, the Real Estate and Lending markets, scams, myths, trends, and my personal experiences as a REALTOR. Of course I'll always try to make it entertaining, but my main goal is to make this blog a reference on which you can rely.