The real estate brokerage industry has gone through some dramatic changes in the seven years that I've been privledged to particpate in it. And quite often, the acceptance of these changes could be marked by the industry-wide kicking and screaming as we struggled to accept, innovate, and keep up. Yet nothing has had more dramatic an effect on the way we do business as the advancement of technology. In the early 1990's, only 10-15% of buyers started using the internet as a primary search tool. And my industry was shaking in its pants! After all, we were the keepers of the information. If you wanted to know anything about what homes were on the market, when they sold, what they sold for, or even to get access to them; you had to come to us. Then all of a sudden.....OMG! If the consumer now had access to all of this information, then what did they need us for? Even though I wasn't a Realtor a the time, I distictly remember op-eds talking about the end of the real estate brokerage industry as we knew it. Needless to say, these gloom and doom scenarios never materialized. But,we don't even have to go back that far. The transaction itself is quickly turning into a paperless affair. For example, Coldwell Banker's Homebase system takes the entire transaction online giving all parties online access to all pertinent informaton and documents. And as expected, some agents are balking at having to turn over pertinent paperwork and/or information about about their clients.
Reality check: We will never again be the keepers of the information. And our value to the public that we're so priviledged to serve lies not in some fictitional proprietary claim to John Does' phone number and email address.
Our value is derived from the mastery of the process!
Wednesday, July 20, 2011
Tuesday, July 19, 2011
sell the large home now...the net effect
Our present economic environment has created a discernible paradigm shift in the psyche of the American populous. The signs are everywhere, that bigger is no longer necessarily better. For example, luxury car brands are now offering compact cars, and many home builders are now rolling out increasingly smaller models.
I feel a bit compelled to write about this trend because I'm presently speaking with a prospective home seller of a large home, and he's considering down-sizing (surprise surprise!), yet this homeowner is hesitant to bring their home to market because my assessment of the property's market value is somewhat lower than his. Could this possibly be you?
If you live in a large home and are thinking about selling it for whatever reason, here are just three reasons why selling now is better than later.
1. The trend amongst affluent buyers is to buy a home that's smaller, smarter, and more energy efficient. Simply put, the demand for large homes is decreasing, and so are the selling prices.
2. Jumbo Loans are becoming scarcer and harder to qualify for. Coincidentally speaking, the FHA loan limit for Jumbos has been reduced in many areas. So even if the buyer pool for larger homes is still be ready and willing, will they be able to buy?
3. Reason #3 is in my opinion the most compelling. Presently, in Miami-Dade County the months of inventory of homes under 3000 sq. ft. is 7.1, while the months on inventory of homes over 3000 sq.ft. is 12.3 months! The effect of this difference in months of inventory is that your large home will continue to depreciate for a longer period of time than the the smaller one that you'd like to buy. To mitigate this situation, consider selling your large home now, and you'll be much more likely to have more money to take with you towards the smaller home home because you will be both selling and buying in the same market cycle. The possible peril of waiting to sell is that one runs the very real risk of selling on the downside of the market cycle while then buying on the appreciating side. So instead of having $10.00 to apply towards your next home, you could conceivably end up with only $7.00.
So if you don't want to miss out on those three bucks, sell the large home now!
Friday, June 24, 2011
Wednesday, June 15, 2011
hyperlocality, and choosing the best agent
“How’s the market?” Seems like everybody wants to know. And it’s really such a loaded question with real world implications for my business. When many folks ask this question, what they’re really asking is “how’s your business”. In other words, the “how’s the market” question is quite often an informal job interview. And the way that the I answer it gives the interviewer a lot of instant information about my knowledge base, my attitude, and my overall proficiency in the subject at hand….real estate that is.
This is not to say that I ought to have a canned, oober impressive, industry laden jargon beast of an answer. But let’s say, all things being equal, that you ask 2 real estate agents the big question:
Agent #1; “The market’s great!”
Agent #2; “The Real estate market today is very hyper local. And those gloom and doom market scenarios that you read about have to be taken with a grain of salt. For example, homes in Las Vegas are down 60% from peak prices, while homes in Pittsburg are down only 1% from their peak. Wouldn’t you agree that they strategy for getting a home sold in either of these two markets would have to be different?”
Now which one of these two agents would you hire to handle the sale of your house?
This is not to say that I ought to have a canned, oober impressive, industry laden jargon beast of an answer. But let’s say, all things being equal, that you ask 2 real estate agents the big question:
Agent #1; “The market’s great!”
Agent #2; “The Real estate market today is very hyper local. And those gloom and doom market scenarios that you read about have to be taken with a grain of salt. For example, homes in Las Vegas are down 60% from peak prices, while homes in Pittsburg are down only 1% from their peak. Wouldn’t you agree that they strategy for getting a home sold in either of these two markets would have to be different?”
Now which one of these two agents would you hire to handle the sale of your house?
Tuesday, May 10, 2011
Wednesday, April 27, 2011
Thursday, April 21, 2011
Short sale vs. foreclosure
There are many legitimate reasons why a homeowner may find themselves in a position where they’re unable to continue paying for their home. And when confronted with this circumstance, a loan modification may be a solution. Yet successful loan modifications are unfortunately not very common. Subsequently some homeowners will ride the foreclosure process out until they eventually have to abandon the property, or they’ll short sell it and move on.
A common question that I get from consumers is “should I do a short sell, or just walk away from the property”. Fact is that there is no one correct answer and people should always consult with an attorney and/or tax adviser before doing anything. That being said, let’s dispel a very commonly held belief. And that is, that other than ruining one’s credit, that there are no additional repercussions in walking away from a property. Based upon my consultations with various attorneys, I can confidently tell you that this if FALSE. Let’s presume that you owe $200,000, you let the property go into foreclosure, you lender repossesses it, and then turns around and sells it at today’s market value of $100,000. Who can they come after for the $100,000 deficiency? YOU, the borrower is likely on the hook. What they can do is get what’s called a deficiency judgment for the $100,000. They can then, if they’re unsuccessful in collecting from you, sell this judgment to a collection agency, who may then sell it to another collection agency and so on, and so on. Furthermore, deficiency judgments can haunt you for up to 20 years; long after your credit would have otherwise recovered!
A short sale may alleviate you from this scenario, particularly if the property is your primary residence. In many cases, my experience as well as that of my colleagues, has been that lenders will waive the deficiency and allow you to walk away free and clear. As a matter of fact, we’re even seeing the waiving of deficiencies on second homes and investment properties. Not to mention, that your credit rating will recover considerably sooner in a short sale scenario. And even in the event that your lender does not waive the deficiency, they may be willing to either reduce the deficiency amount and/or work out a payment plan. Whatever the case, almost anything beats a deficiency judgment. In conclusion, a short sale just may be the difference between having some control versus absolutely no control of an otherwise terrible situation.
A common question that I get from consumers is “should I do a short sell, or just walk away from the property”. Fact is that there is no one correct answer and people should always consult with an attorney and/or tax adviser before doing anything. That being said, let’s dispel a very commonly held belief. And that is, that other than ruining one’s credit, that there are no additional repercussions in walking away from a property. Based upon my consultations with various attorneys, I can confidently tell you that this if FALSE. Let’s presume that you owe $200,000, you let the property go into foreclosure, you lender repossesses it, and then turns around and sells it at today’s market value of $100,000. Who can they come after for the $100,000 deficiency? YOU, the borrower is likely on the hook. What they can do is get what’s called a deficiency judgment for the $100,000. They can then, if they’re unsuccessful in collecting from you, sell this judgment to a collection agency, who may then sell it to another collection agency and so on, and so on. Furthermore, deficiency judgments can haunt you for up to 20 years; long after your credit would have otherwise recovered!
A short sale may alleviate you from this scenario, particularly if the property is your primary residence. In many cases, my experience as well as that of my colleagues, has been that lenders will waive the deficiency and allow you to walk away free and clear. As a matter of fact, we’re even seeing the waiving of deficiencies on second homes and investment properties. Not to mention, that your credit rating will recover considerably sooner in a short sale scenario. And even in the event that your lender does not waive the deficiency, they may be willing to either reduce the deficiency amount and/or work out a payment plan. Whatever the case, almost anything beats a deficiency judgment. In conclusion, a short sale just may be the difference between having some control versus absolutely no control of an otherwise terrible situation.
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