Saturday, June 12, 2010

Real Estate Teams, What is the consumers benefit?

Absolutely nothing! When you see a real estate team advertised what you are really seeing is a subgroup of agents packaging their listings together to make them look more successful on the marketplace. Usually you will find one or two good agents as the leaders of the team. A productive agent normally gets a better share of the commission from the broker for whom he or she works. What these agents do is the recruit agents that are part time, new or just low performers to the team offering them a higher share of commission on their transactions in exchange for their use of the Team name. The leaders of these teams get an override from these agents. One particular team is advertising that they did 124 transactions last year. As a consumer you might think this is a good number. It is all smoke and mirrors. This team has 18 agents working under the team name. 18 divided by 124 equals less than 7 transactions a piece! If I only did 7 transactions in a year I would be out of business! The other problem with the team is the left hand doesn't know what the right hand is doing nor does it even care. It is all about money and how many players they can recruit to the group. When you see an Independent Broker like myself I don't have a team to hide behind. I don't have a big company with attorneys who work on my payroll. When you work with me, you get me. I don't have an attorney on my payroll. I have my feet to the fire and can promise you that you will get an honest hard working agent who will do her best so that you refer me to others and use me over and over again like my past customers do now.

Monday, June 7, 2010

Real Estate Companies are they all alike?

How do you decide on who to list your house with? Some people think that the bigger the company the better off they will be in selling their home. This isn't so in today's real estate business.

Back when I first started selling real estate in the mid 80's it was essential to go to work in the office. We were computerized but that was the extent of it. There was one or two computers for all 50-60 agents to share. We would wait in line for the chance to get on line and search for properties for our buyers.

Every morning the office secretary would run an update on the market. This list would hang on the wall and the first thing you would do is check the list. It would have what was new on the market, expired, pending, reduced and sold. All this information was black and white, no pictures.

When a new listing was posted that might fit your buyers criteria you would run out and drive by it. Then if it was really nice looking from the outside you would try to see what inside amenities it had written on the printout. If it looked good you would call your buyer and try to get them to make an appointment. Once a week you would send out a list of homes that might meet their needs.

Every Tuesday we would caravan to all the new listings that were put on Brokers tour. This was a great way to get your property out there into the agents mind in case they have buyer or find a buyer for your listing. This was a lot of work!

Now we have a computer system that lets us work out of our home offices. The MLS has up to 25 color pictures of the home, an aerial view and map to see locations. Not only are dimensions available but the Realtor can readily look up past sale and mortgage history of any particular home.

With all this information so readily available you would think this would make for better showings. The buyers gets an email about a property that fits their criteria. They can view all of this in the comfort of their home. Nevertheless we still get showing that give feedback "like well my buyer doesn't like splits" or "my buyer wants a bigger yard". I always want to say did you look at the information online?

With all this technology what makes a company different? Everyone knows the biggest companies name. They can easily find their website. The large companies have a market plan that their agents use. It might be their website and nothing more! The good agents pay extra for additional marketing. My personal monthly expenditures are focused on Internet marketing. I am on all the same websites as any of the bigger companies but as an independent I pay extra dollars to be as accessible on all sorts of websites even though all my listings are on all the other companies sites as well. Market values,'s expanded site, Market leader,, Trulia, Zillow the list expands daily. Also strategic targeted Post card marketing campaigns.

It isn't the companies size that matters it what is this agent doing above and beyond the normal MLS and Internet marketing. What other things are they going to do to get it sold. Are they still doing the things that used to work in the 80's. I was one of the first people to have my own computer at my office when I was with the "big company". I was one of the first agents to use a digital camera. Staying on the cutting edge of innovation is essential. So when you are looking at who you should hire to buy or sell a home don't think big box when it comes to real estate. Think Guerrilla marketing. Experience and knowledge with a great reputation is what I bring to your table.

Thursday, June 3, 2010

You didn't miss out on the Homebuyer credit

You didn't throw your money away if you didn't get in on the home buyers credit. The rates just dropped to 4.6% for a fixed 30 year loan. This is down from 5.25%. To break that down if you purchased a home for $100,000.00 at 5.25% with a 30 year amortization your principle and interest (PI) should be $636.11. With the lower rate the new PI would $607.24. Doesn't sound like much but it is a savings of $10,393.20 over the life of the loan!

Also if you make one extra principle payment a year on a 30 year loan you will pay that loan off in 20 years instead of 30. This is another way to make HUGE SAVINGS!The reason this works is the extra payment takes from your principle but your payment is based on 30 years, when the principle gets a little chunk paid down the amortization starts to ramp up, paying more off faster.

We have a new wave of bank owned properties coming on the market. Listen baby boomers who lost some retirement money, this is a chance to make some of that money back! If you are good with home improvements, fixing and repairing things around the house put that talent to work.

If you purchase a bank owned home for $60,000.00 and you use your equity of your present home to purchase it outright. The equity line will be approximately 3.4% depending on what bank you use. This will be a variable loan usually amortized over 15 to 20 years. So lets say it is amortized over 20 years. Your initial PI will be $558.13 a month. Add insurance and property taxes the payment will be $758.13. You rent the house out at $1200.00 per month. That is $441.87 profit a month! What you do is take half of that and pay extra on the loan paying the principle down. If you can convert the loan to a fixed rate after some time all the better. An equity line doesn't cost anything. A regular mortgage costs about $2500.00 to put in place. Most equity loans have a time variable. For instance it can be what is called a 3/5 arm. That means it can go up or down 3% at the time of adjustment every 5 years. Look for this type of term instead a monthly variable. This will protect you from the rate changing and give you a little time to be ready for it by paying down the principle with the extra $200.00 a month. After 10 years you should have the house paid off. The entire amount can now go toward your retirement or you can sell it and cash out.

I can't think of a better way to make money other than winning the lottery! It isn't all bread and butter though. You will need to make sure you are renting to a good reliable tenant. There are some really good companies out there that will do background and credit checks for $30.00. Call me today if this is something you would be interested in.