Posts tagged: property in dubai

FSBO sellers will reject you. Remember, they would prefer not to use your services. But if you maintain a steady, professional relationship, offering help and staying in contact for four to five weeks, you will usually be able to win an interview. From there, a listing follows.

Increase your odds of success by taking these two precautions:

1. Limit the number of FSBOs you cultivate. Focus only on the best clients.

2. Avoid prospects with low motivation or unrealistically high price expectations. These sellers are usually the most toxic, and too often, they will try to take their frustrations out on you.

FSBOs fundamentally turn into a game of lead follow-up. You need to personally and regularly contact your FSBO leads to discover their motivation and qualifications, book a face-to-face meeting, disqualify prospects as necessary, provide regular service and communication, and schedule a presentation appointment. Then you need to repeat the service and communication steps several times weekly until the listing is in hand.

To make personal contact, begin by asking the FSBO seller if you can come by and see the home. You can ask them in a few different ways. You can explain that you want to keep abreast of the regional housing inventory; you can say that you are working with buyers who may be interested; you can present yourself as a potential investor; when you can, you can use the “reverse-no” technique. Following are sample scripts for each approach.

Script for keeping up with the inventory:

“Mr. Seller, your home is located in my core area of sales. Because it is, I would like to come by and preview your home. Would there be a time on __________ or __________ to do that this week?”

Script for working with the prospective buyer:

“Ms. Seller, I understand you are selling your home on your own. Let me ask you this: are you cooperating with real estate agents? What I mean is, if a real estate agent brought you a qualified buyer at an agreeable price to you, would you be willing to pay a partial commission?

We are working with a few buyers for your area that we have not been able to place yet. May I come by on __________ or __________ later this week to see your home?”

When you use the above approach, understand that you are not interested in reducing your commission. What you’re really trying to do is achieve a face-to-face appointment to collect more information on their sellers’ motivation in order to determine the probability of securing a listing in the future.

Script for a potential investor:

“Mr. Seller, your home is located in a solid area for real estate investment. I was wondering if I could come by to see your home as a principle for possible purchase and to see if it is a property that would meet my investment needs. Would __________ or __________ be better for you?”

In using the above approach, realize that the key phrase is investment needs. You will rarely find a FSBO that will meet your investment needs. My personal investment need is a home that can be acquired at a 70% discount below fair market value. Most FSBOs are trying to sell their home at 110% of fair market value. This technique does get you in the door to see the home and talk with them.

Script for a reverse-no:

“Ms. Seller, would you be offended if I came by to take a quick look at your home?”

The reverse-no technique can be used with any script. It capitalizes on the normal reflexive human reaction of “no” in order to achieve a positive response. It opens the door to you to then set an appointment.

FSBO Survey Script

Hi, this is __________ from __________. I am looking for the owner of the home for sale.

Your home is in my core area. I am doing a quick survey of the FSBOs in this area. May I take a few minutes to ask you some questions?

The ad in the paper said that you had _____ bedrooms and _____ bathrooms.

1. Do you have a two level or one level home?
2. Are all the bedrooms on the same floor?
3. Are they good sized rooms?
4. How is the condition of the kitchen?
5. Are the bathrooms in good condition?
6. Can you describe your yard for me?
7. Is there anything else you feel I should know?
8. It sounds like you have a great home; how long have you lived there?
9. Why are you selling at this time?
10. Where are you hoping to move to now?
11. What is your time frame to get there?
12. How did you happen to select that area to move to?
13. How did you determine your initial asking price for the home?
14. What techniques are you using for exposure and marketing of your home?
15. Are you aware that over 86% of the buyers for properties begin on the internet now?
16. If there was a clear advantage for you in using me to market and expose your home, and it cost you very little, would you consider it?
17. Let’s simplify. Set a time to get together for fifteen to twenty minutes, so I can see your home and understand your objectives. I have time available __________, or would __________ be better for you?

Building relationships

FSBO relationships are built over time. By introducing yourself to the owners the first weekend their FSBO is announced, before the masses start calling on Monday, you create a good connection. By sending them tools, educational materials, free reports, and forms, you become an ally. By taking a personal interest in them and their situation, you create a solid connection that, in many cases, pays off when the owners decide to go with an agent they know and trust – preferably you.

Over the course of building a relationship with the owners, you’ll be able to get them to understand that, in every real estate transaction, a commission is paid. In the end, FSBO sellers don’t “save” the commission. Rather, they try to earn the commission by doing an agent’s job. In doing so, they spend their money and time to perform, as best they can, the duties of an agent. Those duties include exposing the home through marketing, presenting the home to buyers, building a sense of buyer urgency in order to prompt an offer, scheduling home inspections, handling qualification checks with the lender, supervising repairs, and facilitating the closing.

Not only is a lot of work involved in earning the real estate commission but FSBO owners unwittingly let buyers basically steal the commission through under-priced offers. The people who shop FSBOs don’t do it for their health. They want to secure a low price and a high initial equity position. In the process, they set out to “earn” the commission, and often do.

By building a relationship over time, you will demonstrate your value to the FSBO seller. Remember at all times, whether you’re working with FSBOS or expireds, your goal is simply to be one of the two, three, or four agents that the owner will interview when the time comes. You just want the opportunity to compete and make your presentation.

The year 2017 was considered as watershed year for real estate industry in India. After the trilogy of Demonetization, GST and RERA, the sector was reeling in despair. However, the indomitable spirit of Indian real estate developers didn’t fade a zilch. They rose to the occasion and started to repackage the product, the price and the promotion of their unsold home inventory. From a sales and marketing stand point, they tried to push the envelope to appease the discerning customer. Some of the initiatives which caught attention were in the form of upselling the product, adding the service element to the product, dove tailing technology with homes, bundle up offers with home finance. The home developers also tried superlative adjectives, spiced things up with bollywood and sports celebrities endorsing various residential projects. Projects got rebranded by international brands and innovative launches were executed in line with global best practices. Many developers even completed micro level infrastructure abutting their projects and took over the government’s role of providing external and internal work. The Government continued to follow a lackadaisical approach to urban planning and infrastructure which hurt the customer sentiment further. Many a times, a home buyer got homes but without a motor able road leading to her home. While all of this was going on, Government also tried to get their act together, albeit, at snail’s pace. The Central Government announced RERA (Real Estate Regulation Act) and the states started its implementation in third quarter of 2017. It pushed developers to fast track completion of projects and a certain deadline date was announced. Many residential projects got completed in this rush of deadline, however the sales velocity didn’t match up the speed of completion of these projects. Eventually, RERA implementation failed miserably in most of the states and could not fulfil its objective to provide transparency to the home buyer. It rather deteriorated home buyer’s confidence and hope in Indian real estate. The home buyer, therefore further delayed decisions to purchase homes and felt comfortable being a “fence sitter”. Due to this conundrum, working capital issues reached to unsustainable level with most of the home developers. Many a times, the monthly sales were still not even matching to meet /clear even the lenders liability. The government came up with certain impetus to announce the affordable housing policy and hoped that this might turn the tables for the customer and for the developers. The intent was to ensure faster delivery at a good price to the customer and in turn achieve good working capital for the developer. Many developers diversified into this space and many new entrants also emerged in this space, including some corporates. However, the product suffered immensely as these new affordable homes were too small and were in far flung areas. Therefore, the affordable home policy could not sustain interest of the buyer, after initial euphoria.
So, after all the hoopla of innovative marketing, government compliances and regulations for last couple of years, the sales further nosedived. The inflation in construction cost created the double whammy for the industry. The construction costs took an upward trajectory, thanks to inflation in cement and steel prices. The regulator also continued with its risk weightage on real estate. Therefore, the financing cost of real estate projects especially in residential side continued to be in the range bound of 15%-24% per annum. With increasing construction costs, depleting sales, increasing lending cost, the home developer was pushed to the limit.
While all this happened, the old age mantra of “reduce prices and sell more” took a rebirth. The residential home prices which were chasing Manhattan prices started their journey back home. The home developers who followed this mantra created huge success, broke record of sales while others continued to sweat. Sales velocity became the buzz word and everything else took a back seat. Some of the home developers started to understand the sales velocity equation in a more pragmatic way. Rather than increasing the pipeline and increase the sales activity, the focus changed to win rate and reduction in sales cycle. Once the focus changed from increasing the sales activity to increasing the win rate, the sales velocity started to increase at good pace. Among the various associations of real estate developers, such sale successes were initially ridiculed as “black swan events” and such developers were termed as “outliers”, in a negative way. There were corridor talks that such developers are killing the industry. The lenders however, welcomed this step and are now gearing up to back up these developers more in such trying times. A sense of appreciation is now being seen among many quarters for these developers and the corridor talk died its natural death. It is expected that many other developers in last quarter of 2018, will follow suit and focus on reducing sales cycle and thereby increasing sales velocity. After all, nothing succeeds like success.
This article is written to appreciate such entrepreneurs in the real estate space who took the call to correct their pricing to achieve higher sales velocity. This article is an attempt to also encourage others to follow suit. Let there be a sustainability in prices for the home buyer. It is an important way to achieve reasonable growth in real estate business in India. Once that’s achieved, the economics will start to favour home developer again and there will be Happier Sundays!

As they say, a fish always rise after striking its head at the bottom of the sea. Its time therefore to rise up and act aptly as per the changing landscape.

Disclaimer: The views presented in the article are personal views of the writer and not of any organisation/company. For any queries/comments/feedback, please write at [email protected]

Here are some ways in which you can sweeten the pot and beat your competition to a sale

Out here in the field we are seeing home prices dropping as sellers respond to housing market pressures. Some sellers are still expecting premium sales prices for their homes, but the transitioning real estate market is resisting high prices and causing sellers to re-evaluate their expectations.

It’s a whole new ball game and, if you want to play, you need to know the new rules. Getting an agent to stick your home on the local MLS system and waiting for the offers to come in won’t cut it anymore. Today, traditional sales methods are not enough to sell your home in a reasonable time for a decent price. Home buyers have too many choices and home options to choose from. They are driving the market and your home is only one of many that they are evaluating.

The obvious response to the market, which has been adopted by many sellers, but at a price, is to reduce the price of your home below other comparable houses in your neighborhood. Although many sellers have built in some wiggle room between their asking price and their bottom line, buyers are asking for reductions that will significantly erode the seller’s profit, sometimes to zero. Those who have a need to move quickly, for employment for example, will even take a loss in order to remove the burden of two mortgages or ending up renting. This situation, by the way, offers real estate investors an opportunity to pick up some good bargains.

Even in today’s market, you don’t have to drop the price of your home to the point of taking a loss. There are other ways in which you can add value to your home, even if it is only perceived value, that will enable you to make a good profit and still sell in a reasonably short time. The use of sales incentives can be a very smart and cost-effective way to add value to your home without sacrificing much of your asking price, if any. Here are some things that can sweeten the pot and make your home a more attractive choice to potential buyers:

1. Offer a 3% commission to the buyer’s agent. Some agents will not show your home for less than that and they will most likely pick your home apart in front of the buyer if they do show it.

2. If you’re in a homeowner’s association, pay the new buyer’s fees for the first year or more.

3. Buy a home warranty, which protects all the appliances in the house including the air conditioning and heating systems. The cost is usually less than $450 for one year.

4. You can pay all or part of the buyer’s closing costs, which can be deducted at closing from your sales proceeds, so you have no out of pocket expense.

5. Pay the buyer’s property taxes for a year or some period. You may already have paid a portion or all of it anyway. Again, no out of pocket expense.

6. If you have oil heat or propane, give the buyer a full tank of fuel.

7. Offer free grass cutting or landscaping for a period of time.

8. Provide all new carpeting or kitchen appliances or leave furnishings that the buyer may want.

9. Offer to pay the buyer’s property insurance for a year or more.

10. Buy down the buyer’s mortgage points by a point or two. This adds significant value to the buyer in terms of dollars saved and it will cost you little.

If you think about it, you can probably come up with more. I have suggested and used these and other methods for distinguishing my clients’ homes in this tough seller’s market. In addition, if you spruce up your home with new paint, especially the front door and kitchen, landscape your yard, clean thoroughly throughout, and stage your home to put it in it’s best light, your home will outshine the others in your neighborhood.

One final suggestion – hire a competent real estate agent. An agent will ensure that you don’t leave money on the table and help you with all the ways in which your home can be the best buy on the block. I can always justify my commissions because I get the home seller more money than he could on his own. A top-performing pro will make you money and not cost you. Just ask the many ‘for sale by owners’ who ended up hiring an agent after an unsuccessful attempt to sell on their own or the ones that ended up getting much less than their asking price. But if you are determined to go it alone, the above tips should help.

Till Next Time,

Bernie Rosellen, Real Estate Auctioneer

Although, there are far – more, real estate agents, than successful ones, it might be helpful, to analyze, consider, and understand, what, the best ones, do, which makes them, stand – out, from the crowd! One of the key areas, which, often, differentiates, between, them, is, how they address concerns, and answer questions, effectively, and to, the best, of their abilities, and, to the satisfaction of one’s actual, and/ or, potential customers, and/ or, clients. After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I believe, strongly, using the 5 – steps, which, effectively, address concerns, and answer questions, not to the agent’s satisfaction, but to his clients. Therefore, this article will attempt to, briefly, consider, review, address, and discuss, why this approach, makes sense, and is effective.

1. Carefully listen: Don’t make the mistake, of trying to prejudge, what someone’s concerns, are, and, carefully, thoroughly, listen, and, then, ensure, you truly understand, what’s being asked! Too often, individuals rush to respond, which sometimes, opens – up, the so – called, Pandora’s Box, and, thus, create more concerns, and questions, which the other person, didn’t previously possess! A simple way, to do this, is to say, something like, In other words, your concerned about, and state, what you think, he said, Do not proceed, to the next step, until you are certain of this first one!

2. Empathy: Since, for most of us, the value of our house, is our single – biggest, financial asset, and, many consider, home ownership, to be one of the essentials of the so – called, American Dream, the reality is, these people, are seeking, an agent, who cares, about them. Proceed, with the utmost degree of genuine empathy, by listening, far more than speaking, and openly, focusing on the client’s best interests (actual, and/ or perceived). One effective way to word – this, is, I can perfectly understand, how you feel, In fact, I felt that way, and so did, many others.

3. Fully answer to their satisfaction: Transition this discussion, by adding, Until they realized a few things. Then, fully answer, to their satisfaction, and not, merely, to yours. Wait for some indication, either a gesture, body language, nodding, or verbal statement, indicating, they understand.

4. Create/ recreate the need (inspire and motivate): Depending, on your relationship, and when the concern was addressed, you need to, either, create, and/ or, recreate the need, in an inspiring, and motivating way. Using expressions, such, as, In light of what we’ve discussed, and reviewed, often, moves the discussion, forward, effectively!

5. Close the deal: Although, the previous four steps, are important, and necessary, unless/ until, an agent, closes the deal, by creating a meaningful, meeting – of – the – minds, and a true agreement – level, the process, will not move forward, in the most meaningful way!

Success comes from practice, discipline, commitment, knowledge, action, and consistency! Will you commit to these tasks, and skills, etc?

It looks like an interesting year ahead in 2007 for the Incline Village real estate market. Affectionately called “The Riviera of Lake Tahoe”, this cozy community on the north east shore is a standout when it comes to short, medium and long term real estate investing. Why are prices continuing to move up here while the rest of America stumbles?

To get an insight into why Incline Village real estate continues to show solid upward gains while the most of the country is licking their wounds, we need to analyze the current inventory for sale, the asking and sale prices for the past three years and the trends that are occurring. Bear in mind that there is a finite supply of homes and condos with virtually no raw land left for development and an increasing demand by the 40 to 70 crowd looking for their slice of heaven in the nicest community at Lake Tahoe.

It is important to look at not just median sale prices but also median asking prices over a long period of time so we can see trends in the market’s direction. So, stick with me and follow the dates and numbers.

The median asking price for single family residences in Incline Village reached a peak the last week of April 2005 at $2,300,000. This number declined to a low of $1,495,000 the second week of May 2006 and has crept steadily upward to its present level of $1,895,000 in late January 2007. The median asking price number is valuable when looked at in conjunction with the median sale prices over the same length of time.

Here are the median sale prices for houses for each of the last three years:

2004 -$865,750 2005 – $1,110,000 2006 – $1,150,000

While the median sale price has ratcheted steadily upwards during the past three years the median asking price rose sharply during the seller’s market of 2005, retreated a bit in the buyer’s market of 2006 and is now starting to creep upwards again. What this tells me is that the mentality of the sellers in Incline Village is one of optimism. Most of the property owners in Incline Village are relatively affluent and can afford to hold onto and enjoy their property through any perceived softness in the market. While the fact that some buyers are sitting on the sidelines is evidenced by the decline in unit sales versus 2005, prices are remaining firm as evidenced by both the median asking and sold prices over the past three years.

Most people who buy property in Incline Village and other high-end resort communities do so because they want to, not because they have to. Most sellers sell because they want to, not because they have to. It creates a market where properties generally sell slower, but at a higher percentage of the final asking price than most other places in the country.

Another key factor is that virtually all of the homeowners in high-end resort communities make their money somewhere else. The prices of the properties bear no relation to local incomes unlike the typical residential real estate market. The prices for properties for sale in Incline Village reflect what an affluent person is willing to pay for any particular property.

We must also keep in mind that the level of sales in units in 2005 was an anomaly since it was by far the biggest year ever in the history of real estate sales for Incline Village and Crystal Bay. When comparing annual sales totals it is better to look at the time period from 2000 through 2005 and compare the average annual totals of unit sales versus 2006 to get a more accurate reading. When one looks at the long-term statistical data we can see that even though sales in units in 2006 are approximately 30% below the average annual totals for the previous five years, the dollar value of the properties being sold is still extraordinarily high and this value is moving upward steadily over the long haul.

When the median asking price for single-family homes was $2,300,000 back in April 2005 we had only 107 houses for sale in the entire community. At the present time there are 157 single-family homes for sale in Incline Village, an increase in the inventory of almost 50% versus April 2005. The fact that we have so much more inventory on the market then at the same time two years ago and yet actual closed sale prices continue on a slow upward path tells me that no price decline of any significance across the board will be taking place anytime soon. Individual properties, depending on the motivation of the seller may provide special values for a particular buyer. But in my opinion, there’s not going to be a general price decline among single-family homes in our market because there is so much intrinsic value in owning land in Incline Village.

When we take a look at the condo market the numbers are even more dramatic in favor of local market strength over the long term. The median sale price of condos for the past three years is as follows:

2004 – $405,000 2005 – $485,000 2006 – $580,000.

The median asking price for condos topped out at a staggeringly high $725,000 during the fourth week of April 2005 when there were only 55 condos for sale in all of Incline Village and Crystal Bay. The median asking price in this category bottomed out so far at $555,000 the first week of January 2007 and has now crept up slightly to $559,000. This is to be expected after the overall median price of condo sales rose an unsustainable 43% in just two years and the inventory jumped all the way from 55 units up to our present total of 126 condos currently on the market.

It is actually a testament to the strength of our local market that the median price of condos did not decline when the inventory increased so dramatically during the past two years. What this shows is the intrinsic value of owning property in Incline Village and all of the rights and benefits that you receive such as access to the private beaches, discounts at the golf course and rec center, specials at the ski area and most importantly of all the phenomenal quality of life that we get to enjoy here.

In summary, I do not anticipate that the number of unit sales will increase dramatically in 2007 versus 2006 although that would be a pleasant surprise. My crystal ball tells me that the median price for houses in 2007 should remain close to or slightly above the median price for 2006.

I feel that the median price for condos in Incline Village and Crystal Bay, due to the excess of inventory in relation to 2005 and the median asking price trend will result in strength for the quality properties that are within walking distance to the Lake and weakness for the lesser properties that are in lower demand locations. There will always be exceptions to this as individual complexes may have a shortage or excess of supply from time to time during the year. It is very hard to generalize about the condo market in Incline Village since each complex has its own unique attributes. Prospective buyers looking for property in Incline Village, Lake Tahoe and other mountain resort communities tend to prefer high quality interiors and locations that make him feel like they are truly away from civilization and up in the mountains.

Copyright 2007 Don Kanare – All rights reserved.

Why real estate agents need to stay motivated and on top of their market

Real estate is sales. No more and no less. You can go for months without selling anything and, naturally, be discouraged that you’ll ever succeed. Feast and famine is the order of the industry. So it is crucial that you break through this feeling to land your million dollar deal for the year. To land those deals you have to BELIEVE that you can do it – and that is why motivation is so important!

Motivation is also important for the following reasons:

a. Personality makes the sale!

Motivating yourself is essential because in real estate it is your personality, almost more than anything else, that counts. Reputation travels fast. Your success will hinge on word of mouth. Make a good impression and many more clients will want you to service them. That is why it is crucial that you feel on top of your field and that you remain confident in your abilities and skills, even when things don’t go as planned. Real estate can be hugely stressful – both for you and for your client. If a client leaves unhappy, whether it was due to your efforts or not, word-of-mouth spreads quickly and can affect your referral network and, ultimately, your bottom-line. Remain motivated!

b. Motivation gives you momentum!

Motivation pumps you up. Real estate is a feast and famine phenomenon. The famine part may be harder to sustain your energy for the feast. But the feast will come if you’re primed for it. That is why it is so important to retain your motivation so that you keep on enhancing your skills and so that you, somehow or other, manage to maintain your relish for your work. Motivated agents are more inclined to go the extra mile for their leads and clients, and the extra mile is always worth it.

c. You are self-employed

At the end of the day, you are running your own business – and that is precisely why motivation matters! As agent, you may work under a broker and the broker may provide you with marketing tools, education and mentoring, but, ultimately, you are responsible for your own results. It will be largely up to you to find the leads, manage them and close the deals. In short, you as agent are a business-person, an entrepreneur, self-employed and, like any self-employed individual, you will have to motivate yourself to keep your business going. In other words, the drive, determination, and self-discipline, must ultimately come from the agents themselves. And that is why it is so important for you to be self-motivated!

d. Motivation is one of the two most important skills!

Real estate hinges on knowledge. You’ll need to know your geographic locality inside out as well as going property prices and industry regulations. But, otherwise, the two most important factors are your personality and motivation. As regards personality, you’ll need to be gregarious, likeable, and you’ll need to possess excellent people skills. You’ll also need to have empathy in order to understand people’s situations and needs, so as to serve them best. Otherwise a positive attitude is crucial. Without that, you are at risk of defaulting on the first particularly since you’ll, likely, find the labor uphill work for you (especially in the beginning) and tend to be disheartened or frustrated. In that way, motivation underlies anything to do with real estate and is basically the corner-stone of your success.

Says Zurple, the real estate lead generation agency: Success in real estate relies on two main things – a great business strategy and a strong drive to succeed. If you’re missing one or the other, you will struggle. And if you have both – your’e on your way to success.

The bottom line is this…

Success in business, especially the real estate industry isn’t the 100 meter dash – it is a marathon. Maintaining a steady level of motion can be tricky, but it’s your main – if not your only – way to success.

Here are three tips that can help you:

1. Recognize your progress: Take it slow and pat yourself on the back for those minor victories. Congratulate yourself for staying on task and for completing all those incremental steps that were so necessary for closing the deal.
2. Find yourself a successful mentor: In the cutthroat industry of real estate finding someone excellent to help you can be laborious. Avoid brokers who are ready to hire you for fees. Take your time in finding someone who is a good match for you, who is honest and who has your best interests in mind so that he. or she, will give you the time and guidance that you need.
3. Organize your time well: Set aside time to speak to clients, review industry reports and statistics, attend meetings, and see to all the other variables that go into the real estate schedule. Improve your skills as you go. Don’t avoid tasks that you don’t like. Be self-disciplined. Look to the future – don’t dwell on your failures; learn from them.

And one more thing…

Get and stay motivated!

In the past – several months, in most parts of this country, we have witnessed, a significant increase, in both, listing, and selling prices, of houses, on the real estate market! Few, remember, as large, an increase, in recent memory! Even, after, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I am amazed, at the level, of recent prices, and sales! How long, will this continue, and, what may occur, in the not – so – distant future? Many factors, are involved, and no one, is certain, how long, this record, unprecedented, Sellers Market, will continue, nor, what might follow! With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 5 key factors, and why they matter, as well as, how important, it is, for home owners, and potential buyers, to understand these.

1. Supply and Demand: Over – time, perhaps, the most significant factor, affecting real estate, residential pricing, is Supply and Demand! How many houses, are available, as opposed to, the number of true, qualified, potential buyers? When supply exceeds demand, we refer to it, as a Buyers Market, and when the opposite occurs, sellers have the upper – hand! Although, we currently, are witnessing, many more buyers, than sellers (houses available), this won’t go – on, forever! Historically, real estate is cyclical, and there is no reason, to expect, sooner, or later, this will again, occur! When might rising prices, and other factors, outweigh, the pent – up, desire to buy, and, what might occur, when/ if, interest rates, rise?

2. Mortgage interest rates: We have been experiencing, record – low, mortgage interest rates, for a prolonged, period! This creates the ability, for many, to buy a more expensive home, because, their monthly payments, will be lower, than usual! Eventually, interest rates, and, thus, the true costs, of a mortgage, will rise, and, how might that impact, the overall market, into the future?

3. Overall economy: Overall economic conditions, impact consumer confidence, and, thus, creates greater activity! Is the economy, really, strong, or is this an after – effect, of, the prolonged period, of pandemic impacts, and emotions?

4. Job security/ confidence: When, the level of job security, and our confidence, in the consistency, and future performance, of all, related factors, we witness, more potential buyers! In addition, many homeowners, after the extended period, we have experienced, seek, both a change, and seriously, consider, trying to take advantage of today’s prices!

5. Specific local area, and market: Certain areas, regions, and specific locations, are, more, in – demand, than others, largely, because of the ramifications, and impacts, related to the pandemic, etc! The immediate impact, occurred, in larger cities, which experienced, lower prices, because of less demand. How long will this occur?

It is generally, challenging, and difficult, to accurately, predict, and time, the real estate market. How, time, rising interest rates, and changing perspectives, as well as, the inability, of some, to come – up, with the necessary down – payment, will certainly create a changing market!

Timeshare and vacation ownership. what are they about? What is it like to have a career in this industry? What does it take to make a six-figure income and to stay employed in the industry?

I am not writing these articles with the intention of hiring anyone since I’m not a sales recruiter. I do have an MBA in real estate development and management and my pet peeve in business is employee turnover. I just don’t like it. Turnover in the vacation ownership/timeshare industry is horrible.

My MBA side of my brain tells me that turnover is expensive and not exciting or positive for anyone involved. You’ve also probably heard that dissatisfied customers or employees can do more damage to the business in the long run than the happy customers and employees can do to improve your bottom line.

If something frustrates you or gets you mad, the best thing you can do, instead of anger management or psychotherapy, is to take action. So here I am.

Most salespeople hired to sell vacation ownership or timeshare need a real estate or timeshare sales license. If you have the time and the money, the more comprehensive full real estate license will allow you more career options and I highly recommend more education in any field if you want to be successful and stay in the industry.

What happens when a person gets a job selling timeshare or vacation ownership. At this time in the industry, potential guests or prospects are marketed and invited to a sales presentation. The majority of these guest invitations include an incentive or gift for the participant’s time. People love gifts, and incentives, and a good deal. We’re greedy, bargain hunters. The industry knows this and depends on us to fill the sales centers for presentations.

As a salesperson, the presentations you will make will often range from 90 minutes to 3 hours, depending on the company you work for. With timeshare or vacation ownership sales the unique factor is that the guest or participant you will try to sell has come to see your resort and product with intentions of getting a gift, getting out fast, and most have no intention of buying anything.

Selling people who have not come to buy anything and often who have an agreement not to buy no matter what you have, no matter how good it sounds, and no matter how affordable. This is such a different form of selling than working in a retail store where people have come in specifically to buy something and with intentions of taking it home with them.

The employee turnover in the timeshare and vacation ownership sales industry is huge. It’s horrible. Employers spend an amazing amount of money to find salespeople and salespeople get in the business and are shocked by the rejection and how hard it can be to sell people their vacations and they run away. A successful timeshare salesperson must be perceived by the guest as authentic and sincere. Companies should have more comprehensive sales training to help build the employees skills so they will be able to stay on the job.

I attended a financial seminar and they discussed the “Asset Value of Employees .” My question is, ” If employees are your greatest asset, how much money and value are you adding to the bottom line of your competitors when they leave you and go to work for your competitors?” If the companies finally calculate these numbers they will have to pay more attention to keeping their employees and not letting them fail and leave.

In the last few years there has been a trend toward a complete discounting of the Cost Approach to value in residential appraisal. For owner occupied homes, the sole technique is now the Sales Comparison Analysis, which involves selecting and comparing individual property sales to a subject property.

Many lenders and government agencies no longer require the Cost Approach technique, even on new or nearly new construction, and appraisers are often instructed to omit it completely, or not to place any reliance on the results. When a lender does require that the Cost Approach be completed, it seems that this is only so that a proper amount of homeowner insurance can be determined. This is, of course, something critically important to the lender as well as the homeowner, but should not be the only criteria for the use of a cost-depreciation analysis.

Years ago a Cost Approach was always required for an appraisal report. The basis of this approach was the Principle of Substitution, which holds that a prudent buyer will not pay more for a home than the cost to acquire an equally desirable substitute home. Accordingly, the reproduction or replacement cost new of a home set the upper possible limit on value, particularly for an existing preowned home. So this analysis served not only as an additional means of estimating value, but also as a governor on runaway home prices.

The cost approach also served an important function as an educational tool for appraisers. To perform this approach, an appraiser had to have at least a minimal working knowledge of residential construction and to carefully observe the quality and condition of the various components of the home. Cost data services, which still exist today, provide continuously updated information on the various costs of construction involved in a home and some are quite accurate.

One service publishes a manual with a wealth of good data and information, complete with descriptions and photographs that illustrate the differences in quality and appearance for different types of homes, which is a great way for new or inexperienced appraisers to familiarize themselves with these features. In recent times I have come across reports by relatively new appraisers where no cost approach was done and it was painfully obvious that the appraiser knew very little about construction or how to evaluate the differences between their subject and the comparable sales they used in the Sales Comparison Analysis. I suspect we have a new generation of appraisers out there who have this deficiency and that’s a bad sign for the future. The best appraisers know something about construction and can immediately spot differences among homes as to their quality level. This ability is also critical for the appraisal reviewer.

The Cost Approach is not without its weaknesses. The primary weakness is in the estimate of depreciation, be it physical, functional or external in nature. These things are difficult to estimate, but again, the appraiser who learns how to do this becomes more knowledgeable and competent, both in the Cost and Sales Comparison methods. Another weakness is in estimating the land value. Actual sales are often not available as a means to determine what buyers are paying for a similar lot and so market abstraction (also called extraction) is used to estimate the ratio of land value to dwelling value from market sales of already built homes. Improperly done, this technique is subject to serious errors. The general rule for the Cost Approach is that it is most accurate when the dwelling is not very old and sales of nearby similar lots are available.

I am of the opinion that the majority of foreclosures involve relatively new homes and that this is where the largest amount of lending losses occur. At least, that’s how it is in my local market which has always had a lot of new construction. There are many reasons for foreclosures, but certainly one is upgrades.

Builders typically offer various home models at “base” prices and offer upgrades for both the home and the lot. Buyers can choose from a wide variety of options to enhance the home and can choose lots that are different in size or that have more trees or other desirable aspects. This is great for the buyer but can become a nightmare for the lender when a foreclosure happens because so many of those nice upgrades do not hold their value in subsequent foreclosure sales, and often do not hold their value as the distressed homeowner desperately tries to sell the home to avoid foreclosure.

The homeowner finds out they are “upside down” meaning the home cannot be sold for as much as the mortgage amount, especially when the initial down payment was very low or when financing costs were included (rolled into) the mortgage, necessitating an increase in the sale price. Another problem is inflated upgrade cost where some builders mark up the prices of upgrades well beyond normal prices that consumers pay at retail stores, even with installation added on. This is similar to what many service contractors (plumbers, car mechanics, etc.) do because they want to make a profit on the “parts” as well as the labor. The problem comes when the markup is excessive.

There is little an appraiser can do about upgrades when it can be shown that buyers often do select upgrades with their new home purchase. In the absence of current resales or foreclosures to compare with, it is not possible to estimate the resale value of upgrades, and values are estimated as of a given date, not the future.

The Cost Approach long served as a reasonable basis for making adjustments to market sales in the Sales Comparison Analysis for individual items. If a home needed a new roof, the appraiser had a handy source for determining the cost for this. Likewise for appliances, HVAC equipment, a garage and the like. Removing the Cost Approach and the good data that comes with it forces too many appraisers to have to guess at these kinds of adjustments and the results can vary wildly from one appraiser to the next.

Long ago homes were valued only by a Cost Approach. The Sales Comparison Analysis (formerly known as the Market Approach) came later. I don’t believe it is a coincidence that foreclosure rates and personal bankruptcies caused by unaffordable mortgage amounts and runaway home prices seem to have increased so much in recent years while the use of the Cost Approach has declined at the same time. Not do I believe it is a coincidence that the decrease in emphasis on cost minus depreciation began about the same time as tremendous inflows of capital into the marketplace encouraged every sort of easy money credit scheme that allowed so many people to buy homes they couldn’t actually afford and that has severely damaged not only the US economy, but the entire world. Mountains of money to lend tend to push caution to the side.

I believe that the Sales Comparison Analysis is surely a good valuation technique, but its down side is that there are too many clever ways for market participants to smuggle hidden costs, fees and even fraud into sales contracts, which make their way silently into market data services and onto appraisal reports. The same can be true for unhidden costs like seller paid loan discount fees and other monies paid toward buyer closing costs. At a minimum, an accurate Cost Approach serves as a useful check on the results of even the most thorough and detailed Sales Comparison Analysis where the appraiser is carefully searching for and analyzing such things. Undesirable things can and do happen in real estate and some can slip past even the best Sales Comparison Analysis because they happen quietly and incrementally.

An example of this is what I call closing cost price compounding. A real estate agent provides a seller a pricing analysis where the agent has found 20 recent sales of similar homes in the area and averaged the prices to arrive at a figure he or she believes is correct for the home. The home is then marketed at that price. Along comes a buyer (perhaps from a higher cost market) who lacks cash, needs some assistance with his closing costs, and makes an offer at or very near the asking price. The seller counters with an offer in which he adds the amount of assistance the buyer asked for to the price.

But what if this type of assistance turns out to be normal for the area and is already reflected in the selling prices of those 20 homes used to set the asking price to begin with? The new sale closes at the upwardly adjusted price and is then used as a “comp” by other agents and by appraisers and the process continues with every repeat occurrence of the needy buyer, causing home prices to rise, affordability to lessen, creating more needy buyers, and setting in motion a snowball effect where prices to rise eventually to the point that they exceed even cost new. This is not unlike interest compounding on your savings account. Over time your balance goes up faster and faster. Combine this with other inflationary market tendencies and you get a nasty bubble that will some day burst to the peril of us all…again.

Obviously, this could be avoided by competent sales agents who understand that those 20 sales already included heavy seller costs and inform their clients of this, but many do not and there is a built in incentive to push prices as high as possible among people working on commission. An accurate Cost Approach would tend to catch this anomaly immediately or at least decrease its effects down the line in future sales because when home prices begin to exceed what it would cost to build an equally desirable substitute home brand new, the competent appraiser knows that something is wrong and that they need to dig deeper into the market data.

A Cost Approach is also a great lie detector for fraudulent appraisals. If an appraiser included a Cost Approach and is using a known cost source or manual that others can subscribe or view, then the estimated costs shown in the appraisal can be reproduced from that same source by someone reviewing the report. So if the appraiser has fudged on cost, that can be detected simply by examining the cost source and parameters the appraiser had described. Moreover, even if the appraiser showed the correct costs, the fraudulently inflated appraisal will exhibit inflated land value in the Cost Approach with little or no support as to where the land value estimate comes from or why it is so high. In fraudulent appraisals, the Cost Approach is “plugged in” with numbers to match the Sales Comparison Analysis. That’s because an honest Cost Approach would have indicated a significantly lower value for the home.

There are other examples of how the Cost Approach could eliminate or reduce runaway home prices, and even detect fraud. I believe it is a foolish mistake to take away or encourage the disuse of any type of analysis or tool from appraisers that has a basis in market data. An analyst in any field of study should be willing and enabled to use as many ways as possible of looking at a problem. Focusing on just one method encourages tunnel vision. I say bring back the Cost Approach and let appraisers decide how useful or accurate it is on a case by case basis. It is not the end-all be-all solution but it is a valuable and worthwhile tool.

A by owner property sale can be a harrowing experience. The sale by owner process is not an easy one especially if you haven’t done it before. In today’s market it is more stressful than ever to sell a home quick. The majority of FSBO home sellers are having some degree of difficulty in making their monthly mortgage payments. Even though you are very anxious to sell your home quickly, you need to be cautious. If you sign a sale contract with the wrong buyer you will be in a worse position than if you had done nothing. You will not want to trust everybody who expresses interest in your property for sale. In fact it is smarter to trust nobody until they prove they deserve to be trusted. It is also smart to hire a lawyer to look everything over for you and give you good counsel on offer and sale contracts. If you are very aware of your buyer’s moves you should be able to spot some danger signs before they become a problem.

The Top 5 Warning Signs That You Have an Untrustworthy Buyer Do not trust a buyer:

1. Who wants to make buying your home contingent on the sale of their old house first
2. Who wants to put up a very small deposit
3. Who wants you to finance their purchase so they don’t have to apply for a loan
4. Who has not received pre-approval for a mortgage loan
5. Who includes many other contingencies in the sale contract which allows them to back out of the deal

Selling your home quickly at a good price is your #1 goal. Be sure to make your #2 goal to watch out for shady buyers so they don’t ruin the whole deal.