Sunday, January 30, 2011

Selling Real Estate in todays market

There are two types of real estate that is selling in todays market. One is new or resale property. The other is bank owned or distressed properties. As a Realtor I would prefer to make my living selling new or resale properties. Unfortunately the bulk of the market (where the money is at)is currently in the distressed market.

I know a few agents out there that have worked themselves into a nice little niche in the distressed market. One of my colleagues has focused his business on this market for over 20 years. He is doing very well but it is not without a cost.

Out of the top agents in distressed sales there are a small number who actually do a great job. Most of them won't even call you back when you send them an offer. My colleague who has been doing this sort of business for over 20 years does a great job. He has a full staff to market and check on the properties. They check the homes every week to make sure there are no squatters and the house is secure and not damaged further.

As an agent when I show distressed sales there are a few issues that I don't usually have with a non distressed sale. The biggest one is will the property be secure. Walking into a vacant house that is not secured for the opportunity to sell it is not my idea of making a good living. Over and over I find these homes missing locks. Also no one shovels snow for these houses. So if I am showing distressed property I am going to dress like I'm having a snow day. There is nothing worse than walking through snow drifts up to my butt to show a vacant home with no heat.

Once a buyer decides on which distressed property to buy we start a whole new set of issues. Are there multiple offers? Will the listing agent even call me back? If it is a short sale how long do we have to wait for an approval? After all this will the bank pay me my commission?

A lot of the people handling bank assets don't have a clue what they are doing. I have found myself having to make dozens of calls just to get the smallest thing accomplished. Like will you accept this offer, can we close this deal, how do I get into this property?

As you can see it is not a pleasant way to make a living. After 26 years of selling real estate I am afraid this distressed market has taken its toll on me. I am 53 years old and I don't want to have to carry a firearm to show houses and make a living.

I applied to Cuyahoga County to work for The Board of Revision. I applied on line. I took a test on line and then went through 3 interviews. Early January I received a phone call telling me that I have the job and they gave me a opening salary offer. After some negotiation I accepted. I had to have a background check and a drug test. I went down to Ontario and Lakeside and filled out paperwork. My start date was January 31, 2010. I was told that I am not supposed to act as a real estate agent in Cuyahoga County because they felt that it would be a conflict of interest.

On January 31 I was told not to come in to work. My new tentative date of hire would be February 14, 2011. On February 9th I got a call telling me that the County withdrew their job offer. After several phone calls I found out that because I am a real estate broker that they felt it was a conflict of interest. If any of my agents sold real estate in The County I would get a percentage of the real estate transaction and they felt that would not be acceptable.

I guess I will continue to sell real estate and not get to be a part of the clean up down at The County. I was honored to get the job and wanted so much to bring some integrity back. I will not close my company down for the opportunity to work for the government.

In order to make a living in real estate in todays market I guess I will be taking a Firearm safety class and acting like Annie Oakley!

Friday, January 28, 2011

2011 will it be better than 2010

As far as Real Estate goes I think that we may be seeing some hope for this coming year. I have been busier than the last few years in January. My colleagues in the Real Estate profession are all stating that they are seeing more interest this year. Of course they always talk big, but I do have some friends that actually tell it like it is and they concur with me.

For the most part I have people looking to make a good investment. I talked with my accountant about taking self directed 401k money and purchasing real estate with it. He wasn't real excited about it. Well I remember 20 years ago I was looking into a 1031 exchange program and no one was excited about that either. I pushed forward, I talked with the IRS to get the low down and set up a third party company to handle the exchanges and saved my clients tons of money!!

I am seeing incredible opportunities to make money. If you don't mind being a landlord this is the time to purchase investment property. One deal I just did will bring in 20 percent profit after taxes and insurance. If my client uses an equity loan to purchase this, he will get a interest write off on his taxes and be able to pay it back within 5 years! Then from there it is all profit. Do three of those and you can retire comfortably.

I own rental property, it is not easy to be a landlord. You have to be tough but have compassion. I always try to fix things right away. My tenants are my customers and I want to make them happy. Like any customer client relationship if they don't pay, you have to make a decision to work with them or severe the relationship.

I have had to evict people and it is not a feel good experience. I have also worked out payment programs with tenants who were going through a tough time and found them to be thankful and loyal tenants because of me being willing to work with them. It is a fine line here where if you are too nice you get taken advantage of. I am known for being quick to evict. If you are 5 days overdue you get a letter posted on your door. If you don't respond to that letter I go forward with the eviction. If you do respond and have a good reason I will work things out. This is what any other business relationship does. Too many people let this go on and on and that is how you lose money.

So if you think you have the stomach for owning property . . . This is the time to BUY!!! You know the saying buy low sell high!