Posts tagged: real estates

I recently read a really interesting blog article from an appraiser in Philadelphia titled “Zillow vs. The Coyle Group”. In the article, Michael Coyle analyzes over 20 of their most recent appraisals and compares them to what Zillow says they are worth via it’s Zestimate. With sites like these appearing to be gaining popularity with consumers over the last few years, I thought I would do my own analysis.

The results may surprise you, they did me. Of the 20 properties analyzed, many of which were recent sales, Zillow differed from the appraised value by more than 5% on 16 of them and the average difference was 20.16%! And the four that were within 5% were recent sales in the last 6 months. That means on an average $300,000 home Zillow’s value estimate is off by an average of $60,000. Another interesting statistic is that it was high/overvalued 10 properties and low/undervalued 10 properties. To further substantiate my results I compared them to The Coyle Group’s and noted that they found an average difference of 18.95%.

When digging deeper into the individual properties, I was unable to determine what exact factor lead to some of the biggest discrepancies. For example, the Glencoe Colonial property is currently an 1100 sq. ft. split level that is going to be torn down and a new 3200 sq. ft. home built. It is listed for $1,199,000 (the exact Zestimate value) and is under contract for around $1,050,000. This would lead me to believe that Zillow is giving the MLS list price the most weight and ignoring the actual property characteristics. However, the Zestimate was off by 41% on the Portage Park bungalow which was listed for $460,000 and sold for the same price. In this case, why would the Zestimate be $273,265? It must have ignored the list and sale price when it appeared to rely exclusively on list price on the Glencoe proposed construction. Yes, I’m scratching my head as well.

While I am not here to breakdown Zillow’s method or algorithm used for determining values, I do want to caution the prospective homebuyer/seller about relying on Zillow’s values and advise that you hire a certified appraiser to ensure that all factors have been included in the opinion of market value. This will prevent you from listing your home too high which could lead to your house being on the market way longer than is necessary. It will also prevent you from listing your home too low and potentially leaving money on the table.

You can read Zillow vs. The Coyle Group here.

A good mortgage sales letter that produces leads from a cold list or generates new business from your old client list is worth 1000 times it’s weight in gold.

Lets say you have a list of 50 clients and 50 leads that you haven’t converted. If you send one letter at a cost of just .42, and $100 for printing. That’s just $142 in total costs for a basic mortgage sales letter.

One new loan can generate several thousand dollars in commission. If you get just one new loan from a mortgage sales letter, you are going to be profitable (assuming you aren’t mailing to an enormous list).

As a result, it’s important to create an effective mortgage sales letter to maximize your lead generation efforts.

The key is to write an effective mortgage sales letter that people read and respond to. Most mortgage brokers don’t know the power of effective writing and rely upon hype and trickery in their letters.

The good news is you don’t need to hype up your letter, and you don’t need to rely on tricks like the old ‘fake looking check in the window’ letter (by the way, this does work, but only if you do it without fooling the recipient).

If you want leads and referrals here are the three most important parts of a successful mortgage sales letter that will help you boost response rates and build your book of business:

1. A Compelling Headline. Almost every mortgage sales letter must have a headline. Why? I’ll let the late great David Ogilvy explain it to you:

“On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.” -David Ogilvy

The job of a headline is to get people interested and excited about what you have to say. For example, a poor headline might say, “Introducing Your Local Home Loan Specialist!”

A better headline would be, “Susan Johnson Saved $498.95 Per Month On Her Mortgage Payment — Here’ How You Can Save This Much or More!”

That headline needs a little work, but it’s light years ahead of the average mortgage brokers marketing letter.

2. Stories Sell. Nothing gets people more involved and motivated to take action than a good story. Instead of cramming a pitch about your products and services down your prospects throat (which puts them into the defensive mindset), tell them a story about a client who saved money instantly. And as a result of saving this money she could pay for child care or get a mini van, or go on a vacation that she has been putting off for a few years.

They key is to write a story that fits into the mindset of your audience. If you are targeting subprime mortgages, tell a story about how a down and out client with no hope. How he brought his family out of a rental in a bad part of town to owning a nice home in a wonderful school district.

3. Call To Action. The next important area of an effective mortgage sales letter is the call to action. You want your prospect to take action and call you or fill out a return reply card.

For example, a weak call to action would be, “Call me at 555-555-5555 between the hours of 8am and 4pm Monday through Friday.”

A stronger call to action would be, “For a free no obligation consultation to see how much you can save on your mortgage payment call me now: 555-555-5555. We can schedule a time to meet and discus your financial situation, or do it on the phone. You can reach me at 555-555-5555 anytime during normal business hours. Or, you can call my toll-free 24-hour voicemail at 1-800-555-5555 and leave your contact information and I’ll send you more information.”

In addition to a headline, a story, and a strong call to action, your mortgage sales letter should include a Post Script (PS), and testimonials. Studies show that up to 80% of your readers will read the PS first. This is where you restate your benefit in a conversational way. Testimonials are very effective in establish credibility, and they reinforce your claims.

If you follow these simple guidelines to a more effective mortgage sales letter, you will generate more qualified leads and referrals.

Sit down and write a mortgage sales letter tonight instead of watching Fringe or Dancing With The Stars. Send it to your current clients, and old leads. You have nothing to lose and everything to gain.

The commission paid to the Real Estate agent is a serious amount of money and a concern in any transaction involving the sell of Real Estate. Where did this six percent commission come from?

The idea of a 6% Real Estate commission being paid to the agent originated during the 1940’s when local Real Estate Boards openly engaged in price fixing to establish a standard rate. This process was an out and out case of an unfair practice, but the 1940’s was a time when the attention of the country was directed to some serious external matters and the idea took hold and spread quickly through the industry.

In the early 1950’s, the Supreme Court ruled that an established 6% commission was illegal. Rather than open up commissions to a more competitive and free market system, the Real Estate Boards merely shifted gears with a bit of fancy linguistic footwork and began to call the 6% commission the “suggested” amount. During the 1950’s and 1960’s, they managed to get away with this practice without much trouble as the majority of real estate agents complied with the suggestion.

In the 1970’s lawsuits brought against the Real Estate Boards effectively put the skids on this practice. The Real Estate agent’s commissions were opened up to competition without the Boards either being able to mandate or even suggest 6% as the carved into stone rate. However, the rate did not alter very much in the years following these court cases. Although the rate may not have been carved into stone, it was pretty much established in the Real Estate market as a standard.

Generally, competitive markets benefit consumers. As long as someone is willing to offer a discounted rate, it would seem that the consumer stood to save money. However, the proponents of a standard 6% rate commission point to such things as health care to argue that the standard rate may actually be helping the consumer by holding the commission down to 6% rather than propping it up to that level. Although the cost of health care is not regulated, the general trend has been straight up off the charts.

Real Estate agents would be quick to point out that if you were to take a close look at just about any service or product being offered or sold in the 1940’s, you would find a very serious increase in cost to the consumer. Except for Real Estate commissions which are still right around 6%. The amount being paid to the agents has increased greatly merely because the value of the property being sold has increased. Today, the internet has been responsible for a few chips in the rock of the 6% commission by offering some straight fee or reduced rate services that allow the sellers to list their own properties. The results are still mixed and the 6% commission is still the standard.

Many home owners in Arizona are facing tough times because of several underlying issues that home owners may or may not be aware of. An Executive Sales Associate with Coldwell Banker Residential Brokerage wants to discuss these issues so that you have useful information to make an informed decision about your future regarding Real Estate in Arizona. Do what you will with this information. This is one Real Estate Agents opinion and makes no guarantees. Market conditions are impossible to forecast. This article is designed to tell you what has been happening in the past, and where we are today regarding Arizona Real Estate issues.

Now may be an excellent time to purchase a home in Arizona. The interests rates are good, the prices are low, and sellers are giving amazing incentives. There is now way to determine if the prices have fallen as far as they are going to go, but home prices seem to be leveling out. Home builders in Arizona are still building massive communities on the outskirts of Phoenix, Mesa, Buckeye, Chandler, and Casa Grande. Builders would not be building if people were not buying these homes. Yes, the builders are giving great incentives. Residential re-seller’s are also giving great incentives because they are imitating the builder incentives.

Home buyers in Arizona are facing a complicated decision right now. Should they live sixty miles from work and pay two hundred thousand dollars for a home, or should they live ten miles from work and pay three hundred thousand dollars for a home? When making this decision, it would be best to calculate how much money you will spend on gas, how much your vehicle will depreciate because of the amount of miles you are putting on your car, how much time you will spend away from family with a long commute, and how much traffic you are willing to put up with. It would be wise to do a mathematical calculation on these factors versus a higher mortgage payment to see which would make more sense financially. However, other factors will be involved such as school districts and amenities.

Buying a home in Arizona is getting more difficult. Lenders are raising the bar because of the drastic increase in foreclosures. When there is a high percentage rate of foreclosures, lenders must raise their standards to protect their investments. Someone thinking about purchasing a home in Arizona will need a series of qualifications to get into a home loan such as a good work history, a descent credit score, and a good debt to income ratio. Lenders are requiring higher credit scores, more income, and longer work histories given the recent foreclosure rates. Lenders are also requiring more documentation on your assets and liabilities.

When lenders raise the bar, not as many people can qualify to purchase a home. This, combined with builders and sellers flooding the market with home listings, is creating an overall slow down of the market because the public’s confidence has weakened. The growth in Arizona is still phenomenal. Arizona is now the number one growing state in the entire United States.

If you are thinking about purchase a home, now may be the best time with the current interest rates, and the amazing incentives available. It is extremely common for people to get into homes with zero down. If you are a seller, now may not be the best time to put your home on the market. If you have to move, consider renting your home out to a good tenant. A qualified Realtor will be able to help you put your home on the market for lease. Lease option purchases are also becoming very popular in Arizona. They are designed to help a person that does not yet qualify for a home have a possibility of purchasing your home at the end of the term of the lease. This gives someone time to clean up their credit issues. However, a lease option purchase does not guarantee that the tenant must buy your home, they just have the option.

There is a link below, a website developed by an Executive Sales Associate with Coldwell Banker Residential Brokerage, that is truly helpful and is designed to educate the public. Definitely take a look at the website if you have been thinking about buying or selling a home in Scottsdale, Phoenix, or any other city in Arizona If you choose Coldwell Banker Residential Brokerage to represent you in a Real Estate transaction, of course they are going to make money. That is not a secret. The seller always pays both the buying and selling Real Estate professionals. When you are the buyer, you do not pay a Realtor. Choosing the right firm to represent your best interests is of paramount importance. Coldwell Banker Residential Brokerage makes it mandatory for their Realtors to get proper education and training. They take the time to train their Realtors properly so that your best interests are always number one.

The collapse of the economy began with a reality wind blowing against the sub-prime mortgage house of cards. We are all living with the results of over aggressive lending practices and over active government intervention. With all these friends who needs any enemies?

As the market realigns, property valuations have plummeted. Some of you may even be “upside down” on your mortgages. Do you buy? Do you sell? Do you ride out the tsunami? This series will go through all the major questions that we normally encounter in determining the value of a property. What are the drivers? What are the inhibitors? What you need to know to get the best value.

What is Property valuation/real estate appraisal?

The purpose of property valuation is to provide a current market based value for a property in comparison to others in its immediate vicinity. So an appraisal is time, location and geography specific. It is a comparative value – not an absolute. Second, real estate appraisals are broken into two broad categories – residential and commercial. For the purposes of these papers we will be discussing strictly residential appraisals. Residential real estate appraisers are licensed by their respective states and have different levels of license levels based on the value of loan for the property. They have to take classes and pass certification tests to gain and maintain their license status. They are also usually bounded by county because of the way Multiple Listing Services (MLS) keep and sell their records. So a good appraiser really knows their geography and what to look for.

Why does it cost so much?

Real estate appraisers are traditionally independent contractors/business people – no appraisals = no money. So while you are paying a relatively standard one time fee (e.g., $400) they have to make sure they get as many appraisals in as they can to make any profit at all. How’s that? After all they’ve got your $400. An appraiser has to cover all out of pocket expenses the same as any business person (education, health insurance, MLS fees, liability fees, business insurance, state fees – the list goes on). In addition a good appraiser may spend anywhere from 3 to 6 hours in preparation (looking for comparables, etc.), have a 45 minute or more drive time to location, 2 hours driving comparables and taking pictures and then another 1 -3 hours writing the report and then if the bank wants more info or kicks anything back they have to invest the time to answer questions, etc.

Also, is they get your request from another appraiser or from one of these new rip off government created middlemen called AMCs – they may have to split the fee. These are all just the costs of doing business. So when someone stops by for 30 to 60 minutes with a tape measure know that it’s the tip of the iceberg and you’re getting a good deal.

Do I own the appraisal?

The person/company who owns the appraisal is the person who commissioned it. So if you are looking for a house loan, your loan company “owns” the appraisal, not you because they are the commissioning agent. Even if you pay the appraiser, it makes no difference – you did not set up the transaction. Why is this important? The appraiser can’t legally give you a copy of “your” appraisal – it’s not yours. If you request an appraisal for loan purposes you may find that it’s not accepted by the bank because they didn’t request it or they don’t know the appraiser. Catch 22 – yes but not made by the appraiser so don’t shoot the messenger. There are all different kinds of appraisals (home, land, cost based, estate, chronological, etc.) and they are not interchangeable. Make sure if you are going to personally request an appraisal you know what it can be used for.

Why do I need a new Appraisal?

The market is so volatile that you may require a new appraisal every 6 -8 weeks for some lenders. In the last eight months housing values have dropped up to 40% in some areas. This means a $1 million house could be going for $600k now. This has made lenders very uneasy and they require more documentation and proof of values than before. Of course they were also the companies that caused the problem – Catch 22 for us. Refinancing has become more challenging as appraised values have gone done so rapidly that people who can manage the monthly payments are penalized because the “value” puts them underwater. For sellers it’s even more emotionally challenging as they believe their homes have a higher value in the market than they do and they get upset, the real estate agents get upset because the deal doesn’t close and the bank says the appraised value I what it is. The appraiser gets attacked for the state of the market instead the banks who created the issue.

How to determine value?

Value is determined the recent sales of similar homes within a given geographic radius. This means sales, not pending sales; people can ask what they want but banks want to know what other similar homes sold for – don’t let your real estate agent mislead you. While the process is meant to be precise, “similar” is a very ambiguous term. Are we talking square footage, age, upgrades, tile vs. marble, pool vs yard, the variables can seem limitless. This is why online value services are worthless and if you pay for them you are wasting your money. Only a live onsite inspection can see and assess value properly. Lenders understand this. Geographic area is also becoming looser. Neighborhoods can change in character so rapidly that the normal radius for a comparable is 3 miles. However because sales have been so slow, comparables are fewer and fewer. Because the lenders require 3 -5 or more valuations per property, sometimes more; appraisers are searching outside the 3 mile radius for comparables. Bottom line – if you’re looking to sell in the next 12 – 18 months don’t do any major upgrades because you probably won’t get your money back. Do what you need to please yourself and that’s it.

Who’s on First in this process?

People who refinance a lot or were thinking about a refinance in the last 6 months often ask this. Remember in the whole real estate process – the bank has the power – no one else. The recent complaints by others and finger pointing at appraised property values is really a distraction as banks with their loan programs and compensation systems drive everything. Because the banks lent money so freely and caused the crash – they have swung 1800 away and are now hoarding cash. To justify this approach they are squeezing loan agents and appraisers for more and more documentation of value. This is especially ironic for refis – people who are already good customers but just want to take advantage of some good rates. Bear in mind that banks don’t have customers they care about for repeat business – you are a commodity. This squeeze play in the name of “making sure it doesn’t happen again” drives up appraiser and loan agent costs which cannot be flowed through to the borrower. If you’re a banker – no big deal – you’re going to get a federal bailout bonus or in the government where it’s basically “who cares it’s not my money” – these things are not important because you don’t really care about impact. BUT if you’re working for a living on $400 increments with no guarantees of where your next job is coming from – it means a lot. The other guy in the process, who used to be a silent partner is the government. They have enacted new legislation to “clean up” the valuation process when it was never broken to begin with. This has backfired into more regulation raising lending costs in the process – some of which has been passed on to the borrower. It has also stifled loan creation – so while still have money they can’t borrow because of government pressures. The psychology is beyond the normal mind to fathom. Everybody that is supposed to help likes to put more rocks in our backpacks as we go up the hill and tells us it’s for our own good.

It also produces lower quality valuations and appraisals. Example, Fannie Mae requires that all appraisals they get be from “certified” appraisers. Because the government requires banks follow suit. Now the difference between a regular appraiser and a certified appraiser is a couple of classes and taking a test. So let’s say you been an appraiser for 20 years, done thousands of honest appraisals, have an MBA and have an excellent reputation – guess what – thanks to the government your out of business until you get spend hundred to thousands more and take a test. But it’s the same job you did before. So now you get a valuation done by someone with little practical experience who happened to take a test but gets the work. That’s the answer to some of the basic questions you want to know in this market. If you’re in the middle of this process and frustrated take it out at the ballot box but don’t kick your appraiser – they’re just the messenger.

Most businesses overlook a very unique concept in marketing known as the Host/Parasite Relationship Model. This area of marketing makes everything a business accomplishes 100 percent more profitable. The Host/Parasite Relationship Models occurs when two businesses enter a joint venture for mutual gain. This essentially means two companies playing offer each other’s business for substantial profit.

The average business spends millions of dollars to connect with consumers through advertising and marketing. Most businesses want to build goodwill and develop a loyal base of consumers and prospects for its product or services. The cost of converting a new customer or prospect is immense. The host and parasitic business relationship allows parasite companies to garner new consumers and prospects by gaining endorsements and offering incentives to customers of other businesses. The parasite gains a highly targeted prospect group based off the established agreement while the host gains revenue without any costs of sales or overhead by receiving a certain percentage from parasite sales. This is a win-win for both parasite and host.

The mutual benefiting relationship between parasite and host allows different combinations of businesses that are synergistic to open vast areas of unrealized profit. For example, the parasite company can show the host company how to make money just by endorsing their company. The host makes money by endorsing another company and recoups the investments made in all business assets. The host also receives a stream of income by banking a percentage of the parasitical company’s future sales.

Consider This Scenario

A real estate agent can make money after a house is sold simply by using the host and parasitic business model. Most real estate agents miss out on a ton of opportunities to make more money after a house has been sold.

Once the escrow closes, homeowners never hear from the agent again. Real estate agents can increase their revenue by simply offering to arrange services to families new to a city or town. The agent would set the family up with every service in need and then receive a percentage of the sales from each company that sells something. The real estate agent at this point becomes the host by bringing companies to the family and getting a percentage of the profit.

The host and parasite relationship means going beyond the conventional sales and marketing routines and tapping into related products or services that costumers need, or offering products or services to other businesses customers in a related industry. The cost in targeting new clients and prospect is expensive. If the host and parasite concept is utilized effectively, a business can target other companies dealing with their type of consumers.

Honesty and Integrity

Sellers need an honest agent, one that will tell them like it is, even if it’s not the easiest to hear. This type of agent will lay out exactly what the seller can expect. From sale price to timing and more. In the end, honesty will save the sellers lots of worry.

Knowledge of Technology

Agents that can use technology with ease are going to be more up-to-date with the current market within the areas. They will most likely be more of an organized agent who has their business in order. This is the type of agent sellers prefer selling their homes.

Enthusiasm for Real Estate

Real Estate is a complex business. It is more than just enjoying HGTV and touring homes. Its requires knowledge of the local community, real estate trends and date along with sales and negotiating skills. The most successful agents love every aspect of Real Estate. When you have enthusiasm for the process, it will feed your clients excitement– and their trust in you. Therefore, enthusiasm is one of the most important characteristics of a great real estate agent.

Well Connected and Reputable

Agents should have a list of prospective buyers within the community and work with a well-known and well-connected real estate company. The more buyer and agents the Realtor knows the greater chance of selling the home quicker. Similarly, well-connected and reputable agents can expose the listings to potential buyers located out of state or internationally. International or out of state buyer are more likely to purchase a home from someone they know, trust and like. In other words, the size and quality of the agents’ network can greatly expand the pool of potential buyers, by putting the listing in front of out of state and international buyers. Testimonials from previous clients also influence the agents’ reputation.

Energy and Drive

To accomplish everything has needs to be done, everyday task, takes lots of energy and drive. In addition, organization. A typical day can involve meeting with buyers, doing listing presentations, putting up signage, showing homes, writing contracts, negotiating contract, attending meetings, keeping up with continuing education, and even moving around items in the home so they are out of sight for the listing pictures. Your drive and ambition, and probably your sense of humor, will keep you motivated throughout the week. Clients will note your energy and drive, just as they appreciate your enthusiasm for the business of Real Estate.

A Winning Personality

Most people expect their agents to have an outgoing personality. Do you have to be super-extroverted to be an agent? Not necessarily. However, one of the top characteristics of real estate agents is a winning personality-a personality that is pleasurable to be around.

Clients are looking for real estate agents they feel comfortable with, one that has traits that gel with their own. A personality that works with one client might not work with the other. In general, it is important to be likeable, friendly, and unafraid of putting yourself out there.

Backed by Local Date

An agent should know how to retrieve localized data and use it effectively. Local date points, including buyer demographics (who they are, where they are) and housing trends (top regions, average value of similar homes, home improvement spending etc.) can be used to price a home competitively, market appropriately, and negotiate intelligently.

Ready and Available

Real Estate is an unpredictable business, and you do not want to miss a sale or closing of a home because you were not available with someone showed interest on a property. Some agents prefer to work within a team of agents. This way, if the agent is not immediately available to respond an inquiry, another agent part of the team can take care of the interested party. Great agents are comfortable with constant communications and prompt replies to any inquiry. They are willing to communicate with phone, text, email and even after hours.

Attention to details

Top producing realtors are observant to details. They spot the smallest improvements that can make a home more marketable and desirable, take the best pictures that show case your home, create attractive MLS descriptions that stand out and make sure all the contract requirements are met in a timely matter.

Tenacity

Top producing agents do not give up easily. They will pursue every lead that shows even the slightest interest in a home. When a top agent hold an open house, they immediately contact everyone that visited the home to discuss the benefits of purchasing the home with them, this is what sellers appreciate about good agents, never give up attitude. They see it as every lead missed is a missed opportunity to sell the home and provide great service to the seller.

The Hester Prynne of literature might have worn a scarlet A to mark her past transgressions, but the house with too much wallpaper might be marked by a giant W in the minds of buyers. Wallpapering every room with pattern-intense wallpaper is a trend that goes in and out of vogue and was last popular in the U.S. in the 70s. Now, potential buyers who spurn its scarlet letter treat a home with too much of it with disdain.

Why Buyers “Hate” Wallpaper

Too much wallpaper can impact the sales price of a house, especially for the new generation of buyers who want homes that are “move in ready.” Previous buyers expected to remove unsightly wallpaper, repaint, and make minor initial improvements when they first moved in. Many buyers now regard what they don’t like as a deal breaker or as license to make a lowball offer for the inconvenience of changing a home to reflect their personal tastes.

Modern tastes tend to be more minimalist. Rooms with florals, plaids, or other prints on the walls and even the ceilings can be overwhelming and make a house look outdated. Large amounts of big flowers remind many people of their great grandmother’s house. Mirrored foils remind people of the 70s and 80s. Why wallpaper is such a big impediment to people often comes down two main factors.

First of all, many buyers have no vision and have a hard time imagining what a room would like without the wallpaper or with different paint. Even more than paint color, wallpaper is a reflection of personal taste. Real estate agents suggest that sellers make their homes more neutral to help buyers in seeing themselves in the space; even then, the result does not appeal to everyone.

Second, the older the wallpaper is, the more likelihood there is that removing it will be difficult. Some dry, strippable wallpaper from 20 or 30 years ago may come right off, but this is not always true, especially if the built-in glue was reinforced with paste. Other types of wallpaper bond to the wall, which makes removal challenging.

Does Wallpaper Impact The Ability To Sell A Home?

Some Realtors® note that whatever wallpaper is in place seldom meets the taste of a new buyer. Based on this, paint is safer. As a seller, should you remove the wallpaper in your house before you put it on the market? As you refurbish rooms, should you add new paper? The common wisdom is that you should be careful in your use of wallpaper when your main purpose is to sell your home. If you can, take it down.

Wallpaper can add a dramatic look to a room when used in moderation. Adding an accent wall of wallpaper that is coordinated to the paint color can make a room pop. Many interior designers recommend this technique. In cases where walls are in less than perfect condition, wallpapering with solid or textured paper can enhance the appearance of the room. Just make sure to select strippable paper.

Even if you’re selling, you can take advantage of the benefits of wallpaper. You just have to remember that you are preparing your home for someone else, not exercising your taste to make your home how you want it. When you move into your new home, you will once again have the freedom to craft your space for you and your family.

Evaluate Property Values

To help you decide on the amount of money to offer, find out what the property values are in a given area. There are plenty of locations where you can purchase condo sales. The prices can vary depending on the neighbourhood, square footage, and overall location. Those closest to the downtown area where there are shops and restaurants cost more.

As you compare the property values, you can get a ballpark figure of what they are selling for. You don’t want to offer too little or your request will likely be denied. You don’t want to offer too much though or you can pay more than you really had to. It is always a good idea to try to negotiate with the seller. You don’t have to give them their asking price.

If they decline your offer, you can decide to increase it or not. Think about your budget and stick to what you can afford. Don’t get into a competition where you have to have it for emotional reasons. You need to look for condo sales opportunities you will be able to afford month after month.

Financing
Getting the money to buy one doesn’t have to be complicated. It is a good idea to look into financing early on though. Make sure your credit report has accurate details so you aren’t blindsided in this department. Focus on paying down debt and avoiding incurring any new debt as you go through the condo sales process.

If you incur new debt, it can lower your credit score and make it harder for you to get a good loan. You need the amount to be reasonable so you can buy the condo you really want. You also want the interest rate to be as low as possible. This is going to influence your monthly payment. With high interest, you also pay considerably more over the life of the loan.

What is Available?
You have several options when it comes to condo sales. You may have to fill out an application to get approved for one based on a background check too. Look online for listings including photos and videos of the property. Look for signs about them for sale and even locations where they are still being built. It is possible to buy before it is completed!

You can work with a qualified real estate agent too. They stay on top of the various condo sales in the area. They can help you to find the location, price range, and set up you really want. They can also help you to navigate thought the price offering stages and all of the final paper work once you secure the deal! This is a much better option than trying to figure it out.

The reputation of the real estate agency should be very important to you. This information can help you to get your hands on what you want before someone else does. Due to the high demand for condos in this area, you can’t drag your feet. You need to be on top of the new listings as they become available.

Demanding consumers

“Internet buyers tend to be better informed on market conditions and better prepared to act on the home they want when they start working with a realtor. Luckily for realtors, these changes don’t necessarily hurt, as long as they are able to adjust to the new relationship and realize that the new-style buyers value speed and efficiency over guidance when finding a home.”

– E-marketer, Internet Home Buyers Changing the House Rules

Thanks to the Internet and other technological innovations, more real estate information is freely available than ever before. As a result, consumers are demanding new choices, improved services, faster transactions and lower prices. According to a recent NAR survey, the number of sellers stating that they didn’t want to pay a sales commission fee rose from 46 percent in 2003 to 61 percent in 2004. In 2004, 23 percent of Florida home sellers opted to sell independently without an agent, up from 14 percent in 2003 and nearly double the 14 percent national average, according to Planet Realtor.

And Web-enabled consumers are demanding a high digital IQ when working with real estate professionals. In addition to being well-versed on their own industry-specific technology, real estate professionals now are expected to utilize laptops, mobile phones, digital cameras, personal digital assistants and global positioning systems to keep pace with Internet buyers and sellers.

Downward pressure

“If consumers are going to do their own home-shopping online, they expect to save some money, just as they would for using the self-service lane. That’s why they are susceptible to online discount brokers and the new affinity companies that are promoting lower commissions if only the consumers will use their agents. These business models promote the idea to consumers that they ought to be paying less money in commissions.”

Realty Times Columnist Blanche Evans

Traditional real estate commissions, typically around six percent of a home’s selling price, are facing downward pressure from consumers and competition. Some consumers claim traditional real estate commissions don’t reflect:

– Today’s home prices. Years ago, when median-priced homes sold for $25,000, real estate commissions were typically five percent, or $1,250. Today, with South Florida median home prices around $300,000, the cost of a six percent full-service real estate commission becomes $18,000. Some brokers even charge additional fees to cover administrative costs. When you consider that today’s average homeowner sells a home every five to seven years, real estate commissions can dramatically impact your personal savings and net worth.

– Owner equity. When selling properties, most homeowners calculate the cost of selling as a portion of sales price, though the commissions are paid out of owner equity. (Equity is the difference between the value of your property and amount of mortgages owed.) Consider this example: You decide to sell a property for $250,000 in which you hold 10 percent equity, or $25,000. After paying a six percent commission of $15,000, you are left with $10,000 before any applicable closing costs. In this example, the $15,000 commission is six percent of the selling price, but 60 percent of the $25,000 equity.

– Services performed. Under today’s commission structure, selling a $100,000 house at six percent typically costs $6,000, while selling a $500,000 house costs $30,000. Does selling the more expensive home really require five times more effort? Your cost is the same whether the agent spends one hour or 100 hours marketing your home. This is one reason many real estate consumers find fee-for-service real estate so appealing.

Developing alternatives

“Consumers want what they want, when they want it and will gravitate to the most cost-effective source to obtain it. Why? Because our “one-size-fits-all” approach to working with sellers and buyers is archaic and won’t allow consumers to access various segments of help they need in a timely fashion. That’s why .com Web start-ups are finding a receptive audience in real estate consumers and why for-sale-by-owners are burgeoning.”

Julie Garton-Good, Author of “Real Estate a la Carte: Selecting the Services You Need, Paying What They’re Worth”

Until recently, you have had few practical alternatives to the traditional full-service, full-commission real estate transaction with a broker. Most sellers paid a single commission fee for a full range of real estate services, whether they needed them or not. Now traditional real estate agencies face the challenge of identifying new services that have value to today’s sophisticated online and empowered consumers.

One result is an “unbundling” of traditional one-size-fits-all real estate services for consumers who want more control over real estate transactions and their associated costs. If you’re willing to take on some tasks traditionally performed by agents and brokers, you could receive lower transaction costs. You might benefit from the following emerging alternatives:

Fee-for-services

“Consumers want assistance from real estate professionals, but don’t want to pay for it in the form of traditional commissions,” says a la Carte real estate Pioneer Julie Garton-Good. Garton-Good has been preaching the fee-for-services gospel for more than 20 years. As the name implies, you can choose which tasks you feel comfortable performing and hire qualified real estate professionals to do the rest. Many traditional real estate brokerages are beginning to offer a more menu-based service plan. For example, you may not mind listing your home and holding open houses, but you may want assistance with contracts and closings.

One-stop shopping

In response to dwindling margins and the rising costs of technology and lead generation, some real estate companies are attempting to combine traditional and Web-based services to provide consumers a single source for all their real estate needs. One-stop shopping sites generally provide or partner with lenders, insurers, title companies, real estate attorneys and others to facilitate all aspects of buying and selling. In addition, some sites are adding home-improvement and related services to stay in touch with consumers between buying and selling transactions.

Web-based discounters

Although many Web-based real estate companies flamed out in the dotcom era, scores of new companies have emerged to take their place. By offering targeted services such as flat-fee MLS listings, buyer rebates and AVM tools, these sites are appealing to independent buyers and sellers who prefer to take a more active role in transactions. In addition to listings, some sites also offer how-to articles and advice for those who choose to go it alone.

Tradition + technology + turbulence = opportunities

So, given the trends, changes and ongoing industry evolution, what can independent buyers, sellers and investors expect in this new era of real estate?

o The Web and other technologies will continue to evolve and transform the $1.3 trillion real-estate industry. Technology will continue to reduce the time, expense and complexity of manual processes, and increasingly sophisticated search and valuation tools will play a more strategic role.

o Free and low-cost real estate resources will continue to be available and even multiply on the Web. In real estate, knowledge truly is power. Consumers will try to use their power to gain more control of the real estate process and subsequently expect to be compensated in the form of reduced and fee-for-service commissions.

o The role of traditional real estate brokerages will evolve as Web-enabled consumers become more knowledgeable. This likely will trigger some restructuring and consolidation of traditional brokerages, but will also drive the development of innovative new practices targeting online and empowered consumers. Real estate professionals will focus more on promoting their local knowledge and industry expertise, while consumers will perform some buying and selling tasks on their own.

o Traditional real estate commissions and profitability levels will continue to face downward pressure from various sources. The future will be profitable for brokerages that are able to extend their core expertise of neighborhood and industry knowledge into flexible new consumer-centric offerings.

o The traditional high-touch, full-service real estate agency is evolving, not disappearing. Real estate professionals who provide exceptional service and value to their customers will always be in demand.

You now can find more real estate knowledge, tools and resources on the Web than ever before, enabling you to buy and sell with increased confidence. For real estate professionals, reinventing the industry means making hard decisions, changing processes and managing new opportunities. But for consumers, reinvention in real estate is a winner, hands-down.

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