Sunday Again

A REALTOR® sent me an e-mail yesterday where she asks:

"how can you and your team member be unavailable for showings on this property on Sundays???? Sunday is a big real estate day...????"

To which I replied:

EX20:9 Six days shalt thou labour, and shalt do all thy works. 10 But on the seventh day is the sabbath of the Lord thy God: thou shalt do no work on it, thou nor thy son, nor thy daughter, nor thy manservant, nor thy maidservant, nor thy beast, nor the stranger that is within thy gates. 11 For in six days the Lord made heaven and earth, and the sea, and all things that are in them, and rested on the seventh day: therefore the Lord blessed the seventh day, and sanctified it.

Well I have been in real estate for four years and have never worked a Sunday. I also take off all Holy Days of Obligation if they don't fall on Sunday. It is a commitment to my religion, that I have never violated, and my properties still sell. My clients respect it when I tell them too! I disclose that I don't work on Sundays before they sign contracts with me.

My team does not work my Sundays for me either as verse 10 is pretty clear that I can't delegate work on Sundays even if I had servants that do not share my religion. Before long I will be opening my own office, and being closed on Sundays will be an office policy. Agents who violate the policy will be invited to take their licenses elsewhere.

I also know many many millionare real estate brokers (people who have earned millions in comissions as opposed to sold millions in volume) who have made the same comittiment early on in thier careers.

It is simply a myth that you need to work on Sundays. Let me ask you these questions:

Can you record a deed on a Sunday?
Can you close on a Sunday?
What real estate attourney works on a Sunday?
Can you visit the assessor's office on a Sunday?
Can you get meters read on a Sunday?
Can you get the fire marshal to give you smokes and carbon monoxide on a Sunday?
How often do you schedule appraisals on a Sunday? Home inspections?

All of these are very important steps to getting a property sold and yet very little of it happens on a Sunday, so why in God's name have real estate agents fooled themselves into thinking that they have to work on Sundays?

The answer is pretty simple: Sundays are the best days for holding open houses. But here's the kicker: I don't hold public open houses! I understand, (and so do my clients) that open houses have nothing to do with selling the property. Open houses are just for the agent to get more buyers and to grow the agent's business. NAR statistics will back me up on this! Well, I have better ways to grow my business than to inconvience a home owner on a day he would prefer to have his home to rest.

If I have an active buyer who is really a serious, qualified buyer, they take time off of work to go look at properties with me. They don't have to do it on the weekend. I do leave Saturdays open for clients that really can't get too many days away from work, but the marjoity of my Saturdays are spent networking and meeting new clients.

You can work Sundays if you like, but I don't have to. I work six days a week, Sunday is just not the day I work.

Now I don't know the perspective you hold. Are you challengeing me to work Sundays, or are you asking if it's possible for you to quit working Sundays?

Are you looking to earn more than 70% of the gross comissions that you bring into the office? Do you want balance between business and family? Are you driving your business, or is your business driving you?

If you'd like to have lunch and share your perspectives with me, let's set a date!

-- End of e-mail reply --

You might be surprised to also learn that I don't get this question very often. In fact it's only the second time in four years that someone asked me about it through e-mail. I am finding that with industry leaders like Brian Buffini eductaing REALTORS® on this topic, that more and more REALTORS® are in fact making a comittment not to work on their holy days.

The hardest thing for self employed workers to do is to make a schedule and keep it. It's about setting your priorities into the schedule first, and then building your work around it. I still struggle with building enough rest time into my schedule. I have a bad tendancy to work very hard until I suffer a physical crash where I need a couple of days of bed rest. It's in my nature to work perpetually, and I if I don't manage myself well, I crash a couple of times a year.

I know it would be worse if I didn't at least have Sundays off!

Perhaps God is wise after all ;)

Bad Loans

In recent months, I've taken my business in a different direction. Responding to the market which has slowed, my partner and I have been contacting home owners that are in foreclosure once we read the public notice.

As we started to contact these owners, we started seeing a pattern where half of them got to foreclosure because of predatory lending practices. Having been a loan originator, I very familiar with the legal commission limits on loans (They are capped at 5%), and so I always review all the debt against the house before we help anyone.

In one case, I found a home owner, who probably never made more than $36,000 a year in his life, who had signed a stated income loan application where the loan originator had claimed $89,000 for an income just to make the ratios work.

While this home owner is himself guilty of fraud, given his limited knowledge of the loan process, I believe the division of banks would also conclude that it was the mortgage company that bears the most responsibility for this bad loan. To many borrower like this one, many of the numbers on the 1003 are very confusing. The borrower often places too much trust into the loan originator, and assumes everything was done legally. I am still urging the home owner to call the mortgage fraud hotline (800-495-2265 ext. 1501).

The mortgage broker is one of the several listed at the Consumer affairs enforcement actions , so it may not really be necessary to bring this loan to the attention of the division of banks.

It's been a tremendously rewarding effort to help people who are in trouble with their mortgages. I take great pride in my industry, and be warned - if you're one of the bad guys, and I catch a bad transaction. I will get the consumer to blow the whistle on you.

Giving Grief

It seems that my buddy Biz at Omni Mortgage is a little concerned that I mentioned him in my blog. Because I used the word 'grief' and his name in the same sentence, he thinks he's getting a bad "sound byte" as it were. When someone googles "Biz Corrow" it pulls up this blog and he thinks that the way it looks in Google isn't very complimentary.

Huh, well I guess it just goes to show that bubble heads have no sense of humor, and no good deed goes un-punished. I love ya Biz, now get back to work, and close some loans for me. ;)


(BTW for you civilian types, a 'bubble head' is an affectionate Navy term for sailors that serve on submarines.)

They just don't get it.

RISMEDIA, June 21, 2006 The Consumer Federation of America (CFA) released a scathing report Monday on how many traditional real estate brokers, and their associations, it believes stifles competition, what reforms are needed to protect home buyers and sellers, and how these consumers can protect themselves.

"Many traditional real estate brokerage firms, and their organizations, function as a cartel that tries to set prices and restrict service options," said Stephen Brobeck, CFA's executive director. "But consumers can take steps to lower 6-7% commissions without jeopardizing the sale or purchase of a home," he added.

According to the report, the desire of traditional brokers to maintain 6-7% commissions and the opportunity for a "double-dip" (one broker collecting the entire commission) lies behind almost all of their anti-competitive actions. In nearly all areas of the country, traditional brokers have tried to charge commissions of either 6% or 7%, although many sellers of higher priced homes have been able to negotiate reductions of one percentage point or even more, the report says.

more of this silly opinion

It boggles my mind that people who come up with these consumer advocacy opinions don't really have any clue as to how the real estate industry works at all! And further, comsumers following this 'advice' will find themselves in a world of hurt!

Yes it is true that commissions have fallen nationally, and that there are "nontraditional brokers" who will work for less than the average commission. But I dare say that consumers are learning the hard way that these options are just the wrong way to go in this market.

The pressure for "traditional" brokers to reduce commissions has its root in one source, and one source only: We've been in a hot sellers market for a very long time. Two years ago, if you planted a sign in a yard, and you got the seller to agree to a reasonable selling price, you could unload the house in a week, and more than the list price. I know, I've done it.

In 2006, market times have increased, and the inventory is piling up. In fact, last week I had to go buy some yard signs out of my pocket because we had run out of signs in the office. My broker was very busy working for his clients that he wasn't able to keep up with the sign demand. My sign maker, Tony Benoit at Wass-Arthur signs in Fitchburg told me that REALTORS® all over town are running out of signs, and that he's getting a lot of orders. Inventory is piling up, and sellers need a lot of help in making sure that their house is noticed by the market, and that their property is competitively priced. Buyers are beginning to understand their power.

So sellers, the tide has turned. If you want to sell in this market you need to work with a REALTOR® who works hard and has ACTIVE methods of promoting your property. And this activity costs time, and time costs money. In a seller's market, commissions will drop. In a buyer's market, commissions will rise.

If it took only a week to sell a home, it's easier for a REALTOR® to work for a discount commission. But if the average time gets out to 120 days, that REALTOR® is incurring costs that while it's being marketed and commissions will have to increase for the REALTOR® to stay in business.

So consumers you have a choice: You can agree to sell your house for full service commission or you can agree to not sell your house for a discount commission.

And the results aren't good. This past week I had 11 leads come to my website and a pattern is emerging that you should all be aware of:

People making a move from one home to the next are taking huge risks in this market. Last year, a buyer could add "subject to the sale of my house" to his purchase and sales agreement, and the seller most always accepted. Now, I see few sellers accepting this agreement, and buyer/sellers making a move expose themselves to the risk of owning both homes if their first home doesn't sell. 8 of the 11 leads this week were from sellers who had risked that, pinched a couple of pennies went with a discount broker, and now they are the proud owner of two houses. These people visit my ibuyhouses.com site and now complain that their discount broker didn't do the job and they are stuck.

I have someone very close to me who is selling a house, and she made the same mistake. I tried to refer her a REALTOR® who'd really get the job done, and she signed up with two discount brokers one right after another, and now she's facing foreclosure. She's no closer to selling that home as she was 10 months ago.

This is serious business it is not a game!

On the other hand, I'm really excited to be a REALTOR® in this market! The referrals and leads are coming in because of choices I made on how I did my business these past three years. I've refused to do loans or take sales from clients when I knew it would be best for them to stay put. They are happy with me now that they can look back on my counsel in hindsight because they now understand I was a true fiduciary.

So if you really need to sell in this market, I've got one question for you:

What is your EXIT strategy?

Majority of Americans Think Solar Power Should Be Offered on All New Homes

RISMEDIA, June 22, 2006—Eight out of 10 Americans believe that home builders should offer solar power as an option for all new home construction, according to a recent Roper survey commissioned by Sharp Electronics Corporation. The survey was conducted in May among 1,004 adults to measure their perceptions of solar power.

When it comes to the cost of solar energy, the survey showed that two-thirds of Americans are willing to pay a premium for homes that have solar systems installed, when told that solar homes have a proven higher resale value. One-half of those surveyed would spend up to 10 percent more for a solar-equipped house, indicating that the cost of a solar system will not prevent Americans from embracing forms of clean, renewable energy.

more...

Buyers Will Be Key!

"So how's business?" People always ask.
Normally I'd be excited with the number of listings I'm carrying. My signs are going up all over the state. But as one broker friend said, "I need a new listing like I need a hole in the head! What I need are buyers!"

And she's right. Inventory is building up and market times are lengthening. I've come to the realization that to survive in 2006, a REALTOR® needs to find motivated buyers. Not just any buyer, but those that will actually buy something andwith ing 3 months or less.

Face it, the buyers have the cash, (or the financing) and without that, nothing will be sold. The REALTOR® who keeps a good list of highly qualified and motivated buyers will be the most valuable to the market.

Secondly, a REALTOR® who has a great list of first time home buyers should be working that list to shake a few buyers into the market. This is a good time to buy, there's lots to choose from and many sellers are getting anxious. We've past the best part of the Spring market, and there are a lot of property that will simply sit out the Summer as everyone who can afford a vacation will be on one, and anyone who can't won't think it's a good time to buy a house.

But it is a good time to buy! It's just not common knowledge.

So, what does that mean to me? If your a seller and you're also wanting to buy, you have my attention. You have to be motivated to price your house properly in this market or I won't bother placing myself under your contract.

Huh? Yes that's right, a lot of people seem to forget that the listing contract is bi-lateral. Before I place my services under contract and accept tliabilitylty of selling your home, you best be someone who really wants to sell. I don't have any time in this market to take an over priced listing.

My fellow REALTORS® know how I price homes too. They know that if I've put a price on your house, it's a good value for the buyer. They know not to beat me up for the list price, because another buyer may beat them.

This is good news for my sellers too. Sellers have always been in competition with other sellers. Today, that competition is really heating up.

So, in my best Jack Nicholson voice, "I ask ya, do ya want to be sold? Or do you want to be just listed?"

Getting back to that first question, if you dare to ask me how's business: standby to standby!
I will tell you about everything I have to sell, and then I'll ask you if you know anyone who's buying.

Buyer's Market Anecdote

Yesterday, a seller with a condo in Sutton contacted me through my website, hoping that I would buy her house as an investor. Since she did not seem to be under any financial strain, I discounted the idea of being able to purchase her property at a substantial enough discount for an investor.

So I dug a little deeper to see if it was possible to serve as a REALTOR®, and simply get a real estate commission for selling her house. Well, of course she was already listed. But I wondered if it made sense to sell myself as her new favorite REALTOR®.

Well I found that her condo was on the market for a total of 165 days, and she’s listed at $290,000. But here’s the kicker: there are four other units in her complex listed between $324,900 to $344,900, and the one for $324,900 has the exact same Gross Living Area and floor plan.

So I dug deeper, yes in February, a like kind unit sold for $297,000 and she was listed at $299,000 on the day the offer was accepted. So the cheaper unit snagged the buyer. Was this REALTOR® a goofball? Not that I can see. It looks to me he’s doing everything right.
So I called the REALTOR®. I told him that it was a courtesy call, that his seller was getting jumpy, and I couldn’t find fault with his methods. I said that I had e-mailed his seller and advised her to stick with her current REALTOR®.

So we got a bit chummy and he told me about his market in Sutton. He said that he’s been a REALTOR® for 16 years, and he normally carries 10-15 new construction listings at any one time. “Normally,” he said, “I would get 3-5 calls from buyers a day on those listings. Today I can’t even get 3 calls a week!”

Well, we’re all feeling it, the market has shifted to the buyer’s side. This is great news if you’re a buyer, and if you’re a seller this is the wrong time to try to sell your property yourself! Tell your friends who may be a For Sale By Owner, or are using an entry only listing like “Help-U-Sell” or “YourIgloo.com” or worse: “isoldmyhouse.com” that they are making a tragic mistake that could cost them a whole year of market time. Work with a full service broker!

On the other hand, this is a great time to be a buyer. While many properties are overpriced, this is an excellent time to make some deals. There are sellers out there very hungry for buyers. Take advantage and buy right!

RISMEDIA, May 26, 2006—Existing-home sales eased in April on the heels of a two-month rebound, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – slipped 2.0 percent to a seasonally adjusted annual rate1 of 6.76 million units in April from a downwardly revised level of 6.90 million in March, and were 5.7 percent below the 7.17 million-unit pace in April 2005.

David Lereah, NAR’s chief economist, said the decline was expected. “Our leading indicator for pending home sales was trending lower, and our forecast model is showing a modest decline for the second quarter with sales leveling out before rising in the fourth quarter,” he said. “Higher interest rates are slowing home sales, but we see this as another sign of a soft landing for the housing sector which remains at historically high levels.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.51 percent in April, up from 6.32 percent in March; the rate was 5.86 percent in April 2005.

The national median existing-home price2 for all housing types was $223,000 in April, up 4.2 percent from April 2005 when the median was $214,000. The median is a typical market price where half of the homes sold for more and half sold for less.

NAR President Thomas M. Stevens from Vienna, Va., said the big run up in home prices is over. “After five years of booming sales, we are now experiencing normal market conditions across most of the country,” said Stevens, senior vice president of NRT Inc. “Inventories levels have come up to balanced levels between home buyers and sellers, so the pressure has come off of home prices and most owners can expect steadier gains in home values for the foreseeable future.”

Total housing inventory levels rose 5.8 percent at the end of April to 3.38 million existing homes available for sale, which represents a 6.0-month supply at the current sales pace.

Click here to view EHS Data

Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 5.92 million in April from 6.04 million in March, and were 5.6 percent below the 6.27 million-unit pace in April 2005. The median existing single-family home price was $222,700 in April, up 4.3 percent from a year ago.

Existing condominium and cooperative housing sales declined 2.7 percent to a seasonally adjusted annual rate of 839,000 units in April from an upwardly revised pace of 862,000 in March, and were 6.3 percent below the 895,000-unit pace in April 2005. The median existing condo price3 was $222,000 in March, down 0.2 percent from a year ago.

Regionally, existing-home sales in the Northeast slipped 0.8 percent to an annual sales rate of 1.18 million units in April, and were 2.5 percent below a year ago. The median price in the Northeast was $283,000, up 5.6 percent from April 2005. Existing-home sales in the West declined 1.4 percent to an annual pace of 1.41 million in April, and were 13.0 percent below April 2005. The median price in the West was $348,000, up 4.8 percent from a year ago.

In the South, existing-home sales eased by 1.9 percent in April to a level of 2.61 million, and were 3.7 percent lower than a year ago. The median price in the South was $180,000, up 3.4 percent from April 2005.

Existing-home sales in the Midwest fell 3.7 percent to a pace of 1.57 million in April, and were 3.1 percent below April 2005. The median existing-home price in the Midwest was $166,000, down 1.2 percent from a year earlier. RISMedia welcomes your questions and comments. Send your e-mail to:

Blogging Can Actually Pay!

My goodness! I was invited by forclosesuremass.com, a great site that produces weekly reports of forclosures in the state, to write an article for their newsletter.

It took a month before what I wrote fit into the monthly theme, but it was just published yesterday. First, one of my friends at Lisa's Cafe in Harvard stopped me early in the morning. "Did you write that?", asked Jack. I assured him I did, and he actually had nice things to say about it. (You have to know Jack)

Then I get a call from a mortgage broker I send business to, Biz Corrow of Omni Mortgage in Salem NH gives me grief about how I seem to be popping up everywhere in his life.

Then after being out all day, and listing a great 4 family in Gardner, I get back and find 5 new e-mails from people I've never met who want to work with me in some fashion.

Well I can't thank the people at foreclosuremass.com enough, and a big thank you to Michael Katz of Blue Penguin Development who is their contract publisist. He did a great job with editing my aritcle. (You may have noticed I tend to be a bit verbose.) He trimmed the fat and really made it shine.

The article was titled "Bank-Owned Properties Offer Terrific Investment Opportunities", and pointed out that investment deals can be found on MLS if you know where to look. While most everything on MLS is not a deal, there are enough to make you plenty of money. You just have to be selective. and it helps to work with a REALTOR® on your team.

Anyway, you need to subscribe to foreclosuremass.com to see the article since they have have the copyright.

The Death of Print Media

This is a repaste from a magazine I subscribe to as a REALTOR®. And when I see good things that support important perspectives I love to share it with my clients and professional peers.

I have been saying for years that the effectiveness of print advertising is diminishing by the day. If you look at real estate books, or the Surburban to find a home, you may notice that the advertisement is actually focused on the REALTOR® and not the properties that are apparently being promoted. Think of it, you look in those magazines to find homes, but most of the add copy is taken up by a REALTOR'S® picture and how you can get a hold of them, oh and then they show you a few homes just so you can think they are pretty good REALTORS®.

However, I challenge you to open up a newspaper and say "Show me all the 3 bedroom 2 bath houses between $300,000 and $400,000 within the towns I want." It doesn't work like that. You have to read the whole paper to make sure you didn't miss anything important.

This article will prove that buyers are making more and more use of the internet and their buyer's agent. Therefore, when I market a property it is to other REALTORS® and the internet with complete virtual tours.

RISMEDIA, April 27, 2006 Thirty six percent of buyers who bought a home in the last three years said that they first learned of the property from their real estate agent, according to a survey released by Prudential CA/NV/TX Realty. Thirty one percent of buyers learned about their home online or on a real estate Web site, while only five percent found their home in a newspaper.

Our survey findings demonstrate that even as technology rapidly transforms the real estate industry and consumers increasingly turn to the Internet in their home search, the agent/client relationship continues to be in the forefont", said Sherry Chris, COO of Prudential CA/NV/TX Realty.

Added Chris: Agents remain an essential source of information for consumers, but the relationship is changing as agents play more of a consulting role. Successful agents understand the importance of the Web to consumers and fully utilize technology available to them, not only to manage their business but to understand how to relate to and serve a progressively savvy client base.

The survey also found that 18 percent of buyers surveyed found their home by seeing a yard sign or driving by the home and nine percent of buyers heard about the home they bought through a friend.

Other survey results focused on what buyers were viewing online, what they liked about searching the Internet for homes and what they felt was the most important aspect of looking at homes online. When buyers were asked to identify the most important areas of consulting a real estate website, the top three responses were: “looking at property photos” (89%), followed by “property search” (85%), and “mapping a property” (77%).

Less popular responses included finding “financing information” (31%), “locating an agent” (26%), and “career information” (11%). When asked what buyers liked most about using the Internet for their home search the top response was “it saves time,” (91% of respondents) while only 45 percent felt “it empowers you in the transaction.”

Editor’s Note: Results are based on a telephone survey conducted among 300 adults living in private households in Northern California, who purchased a home in the past three years and used the Internet to search and view homes. At the 95% confidence level, the margin of error for the total sample of 300 is plus or minus six percentage points.

Since I always work with an exclusive buyer's agency contract, which sets my fee, when my buyers e-mail me asking for more information on a property, I send them the whole history of the property. It includes the number of days on market, price changes, the number of accepted offers that fall appart, even the names of all of the REALTORS® who tried to sell the property before the current REALTOR® started working on the listing.

I also include the co-broker fee so that the buyer knows how much above or below that fee my fee is. You can't get that from a paper, and by current MLS rules, you can't get that from public websites. My buyer's love it, and I love to help them interpret the data.

You can't get any of that from print advertisements, and so I don't spend my money there.

Real Estate Made Me Do It

By Eric Woolhiser

It is hard to put this into blog format, as the topic is deep enough to write an entire book about it. (And I am working on it ;) ) I’ll to my best to keep it brief:

On March 8th this year, Laura and I unexpectedly removed our children from a private Catholic school where we had been attending Mass for the better part of thirteen years. That Wednesday morning, we simply didn’t bring our children to school and we instead took the family out to the Museum of Science.

We had six of our children enrolled in the school and with any large number there’s likely to be fall out of any system. My oldest boy Michael had completely shut down and was refusing to do work. Stephen was frustrated and was frequently kept after school for failing to complete all his home work. And depending on the subject, just about every child was failing to live up to his potential.

The teachers running the school naturally had nothing positive to say on the matter and decided to lay the full blame on us as parents. Without getting into too much detail, we think the failures were a shared responsibility of parents and teachers.

For the three weeks prior to departing the school, Laura researched the home schooling option. With eight children, two dogs, and a real estate business all running out of our home, it took some selling on Laura’s part to convince me that we could and should home school.

The school was and is a great school. What I need to know was that if we were to leave it, we would leave it for something better. I am reminded of St. Paul’s writing in 1 Corinthians:

But when that which is perfect is come, that which is in part shall be done away.

It was because of my training through Buffini & Company that I was able to recognize the problem, and that it was intractable with classroom education as a teaching partner. What we were dealing with was a crisis of self-esteem. We as parents, and they as teachers were not using our best leadership skills to champion the children and positively motivate them to accomplish their best efforts. Through a slightly misguided understanding of Catholic tradition, there was a serious confusion between self-love and self esteem. The former is to be hated, and the latter is rarely understood by traditional Catholics.

Brian Buffini in his Turning Point manual provides five symptoms of poor self esteem, and four of them were clearly evident in the system of education between the school and our parenting.

Now that we’ve made the change, and have home schooled for a full month, Laura and I wonder why we hadn’t made the move sooner. The house is quieter, the children (and parents) are better rested, and keep up with the school work and keeping the house cleaned. There’s a lot more time for love in our family, as it’s not spent on 3-5 hours of homework each evening. We normally accomplish all school tasks by 2:00 PM. The kids are reading voraciously now, over and above the required reading. The Television is hardly turned on! And yes, even the kids that were doing poorly in school before are now working ahead of schedule.

Why hadn’t we made this move earlier? We didn’t recognize the need. It was because I was studying real estate so intensely that my eyes were opened to the difficulty.

While Buffini and Company is a real estate business coaching company; Brian points out that “you can double your income as quickly as you can double your self-esteem.” Now that we’re improving that area of our lives, business is going much better as well!

So I want to thank my Buffini coaches Mark Maureman and Paul Hayes and all of the fine folk at Buffini and Company, and especially Beverly and Brian Buffini themselves. Without your guidance Laura and I would still be at our wits end as we continued to raise unhappy kids and be completely clueless about the solution.

So yea, real estate made me do it.

Keep your Eyes Open New York!

RISMEDIA, April 14, 2006—(KRT)—The New York State Bar Association is pushing for a state commission to study proposed amendments to the laws regarding eminent domain.

The effort is in response to last year's U.S. Supreme Court decision that sent shock waves through the country. The high court, in a 5-4 split, gave local governments more power to seize people's homes for purposes of economic development.

...

"Kelo is based on established legal precedent," Buzard added in his written testimony. "It is not a revolutionary departure from existing law, and, in fact, would have been decided the same under New York law. Furthermore, our position is that unwarranted attacks on the ... decision are based on misunderstanding, that they undermine public confidence in the judiciary, and are inappropriate. Referring to members of the (Supreme) Court as 'commissars' or accusing them of using 'Gestapo tactics' is demeaning to our judicial system and is contrary to the facts."

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Housing Market to Stay on High Plateau

RISMEDIA, April 12, 2006—Home sales should generally level-out and remain at historically high levels, according to the National Association of Realtors®.

David Lereah, NAR’s chief economist, said mortgage interest rates are trending up but will remain favorable. “Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect,” Lereah said. “Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau, meaning this will be the third strongest year on record.” He expects the 30-year fixed-rate mortgage to rise to 6.9 percent by the end of the year.

Growth in the U.S. gross domestic product is forecast at 3.7 percent in 2006, while the unemployment rate should average 4.8 percent.

Existing-home sales are projected to drop 6.0 percent to 6.65 million this year from a record 7.08 million in 2005. New-home sales are likely fall 10.9 percent to 1.14 million from the record 1.28 million last year – both sectors would see the third best year following 2005 and 2004. Housing starts are forecast at 2.00 million in 2006, which is 3.2 percent below the 2.07 million in total starts last year.

NAR President Thomas M. Stevens from Vienna, Va., said home prices are expected to cool, but not as much as in earlier projections. “Although housing inventories have been improving, the balance is still a bit more favorable for sellers and annual appreciation remains in double-digit territory,” said Stevens, senior vice president of NRT Inc. “Even so, the market is in a process of normalization – appreciation will return to normal single-digit patterns, providing solid investment returns into the future.”

The national median existing-home price for all housing types is likely to increase 6.4 percent this year to $221,700, while the median new-home price is expected to rise 2.3 percent to $242,700.

Inflation as measured by the Consumer Price Index is seen at 3.4 percent in 2006. Inflation-adjusted disposable personal income should grow 3.8 percent this year. RISMedia welcomes your questions and comments. Send your e-mail to: mailto:realestatemagazinefeedback@rismedia.com?subject=.

Criag's List is no Threat

By Eric Woolhiser

My wife Laura, has forward me an e-mail that a lady on her home schooling e-mail list had posted Thursday which is an article written by James Hagerty and Kevin Delaney, and I don’t know where this was published.

Laura and I have just started our fourth week home schooling our eight children. Laura had urged me to take the children out of a private Catholic school for nearly a year, but I would not have recognized the need so well had I not been a REALTOR® for these past 3 years. Since I am a REALTOR® Laura thought it would be a good idea if I offered the mail list an alternate perspective to balance Mr. Hagerty and Mr. Delaney’s article. Here's what I wrote to send them:

I do not consider the article a threat to the real estate industry, but it is a threat to consumers who may be contemplating a real estate transaction in the near future. I find the article makes a number of assumptive errors and neglects some of the market forces behind the recent trends and its conclusion is pronounced in its title long title ”Google, Craigslist Expand Into Real Estate With Listings From Owners As Well as Agents, Sites May Weaken Realtors' Hold”.

The first mistake made is that article reports the total real estate listings on Craig’s List rose to 335,126 in March. We are given the impression that this number is solely the product of ‘For Sale By Owners’ or sellers not represented by REALTORS®. The article fails to disclose how many of the homes have actually been entered by REALTORS® who are representing sellers. I have not made it a marketing practice of my own, but many of my peers have personally tried to persuade me to enter my listings into Craig’s list as they firmly believe it has helped them capture more “double ends” or transactions where the REALTOR® procures both the buyer and seller, and is therefore entitled to a “double commission”. To be honest, I have test used Craig List, and have decided it’s not a very effective marketing approach, and has not contributed measurably to my clients’ home exposure. I know many REALTORS® who disagree with me, and they are making extensive use of Craig’s List to market their listings which is far from the impression the article leaves with the reader.

The article later states: “The proliferation of real-estate sites comes as brokers are under pressure from several directions. As home sales slow, an increasing number of discount brokers are vying for customers. In addition, the U.S. Justice Department and the Federal Trade Commission are investigating industry practices that they say deter competition. Commissions on home sales have declined slightly over the past decade and now average around 5.1%…” which is partly true, but misses the mark of being true. This is the biggest failure of the article, because it does not explore why it is that commissions have fallen.

There are two reasons, and neither of them has to do with new web technologies. The first thing consumers should understand is that we have finished a long “sellers’ market” cycle in which the sellers could inflate prices because the demand for homes has outstripped the supply of buyers. When we are in a seller’s market, it is easier for unrepresented sellers to sell homes, and discount brokers will increase their market share among real estate professionals. Thirdly, the industry explodes with REALTORS® entering into the business because a) there is a perception that there is easy money to be made and b) many home owners notice the huge appreciation they’ve experienced and decide that they want to learn much more about real estate investing, and they enter the industry. I personally belong to the later category. Many of these new REALTORS®, who lack confidence in their own ability will often allow sellers to beat down the commission they would normally ask for. We call this a “commission-ectomy”

I’m sure you can see that when the market favors discount brokers whom may either accept lower percentage commissions or enter homes into the Multiple Listing Service for a flat fee of $300-$500 dollars, that this would bring the average commissions down to the 5.1% that is cited by the article.

But the opposite is true in a buyers’ market. As demand is reduced, market times lengthen and prices fall. Unrepresented sellers will fail to sell their homes at an even higher rate then they do in a seller’s market. Even those that pay for the flat fee MLS service and do not receive a broker’s opinion of value will fail more frequently.

I should also tell you that before I became a REALTOR® I tried to sell my own house in the peak of the seller’s market, and after nine months of trying on my own, I handed the job to a REALTOR® and she sold my house in two weeks. What was particularly poignant was that she sold it to a buyer who had attended one of MY open houses three months earlier. Now that I’m a REALTOR®, my personal best has been to sell a home in six days.

But back to the buyer’s market: You will see the following trends this year: First, there will be fewer unrepresented sellers. Second, there will be fewer REALTORS® as the lazy ones won’t be selling enough houses to survive. Finally, full service brokers will increase market share over discount brokers. I’m really looking forward to this next year, as I’ve long ago decided to stay on the full service side of the market. So I hope you’ll conclude with me, that average commissions are about to increase, and none of this has anything to do with the internet.

But what does the internet do for us? I will tell you it has had a huge impact on the way real estate is transacted, but not in the way the article concludes. The internet has dealt a decisive blow to print media. NAR reports that somewhere between 75% to 80% of home buyers will begin their search on the internet. As I point out to my clients, you can’t open the Boston Globe and say to the paper “Show me all 3 bedroom, 2 bath houses in my town between $300,000 to $400,000 that have over 1 acre of land, a basement, and a 1 car garage, oh and sort them by price.” However, many REALTORS® provide no obligation access to a website that can do just that. Also, the public is treated to multiple color photographs and virtual tours. Print media is both expensive and growing less effective by the day.

But there is still one more reason why there will always be REALTORS®, and I’m going to bring my experience as an object oriented computer programmer for this insight. I promise not to get too technical.

No two properties are ever the same. There is not enough space in all the file systems of the internet to perfectly describe every detail of every property nor will the entry of the data ever be consistent enough that a home buyer will view a property on the internet and without visiting the property, decide to fax an offer or send a PGP signed e-mail directly to the home seller. Searching for the right home is WORK. It takes many homebuyers months of looking before they have the confidence to make an offer. How many people on this mailing list have actually bought a house without a REALTOR® touching the transaction? If you have, would you do it again?

Whew! Sorry for being long winded, but if you got this far, and would like to read more of my opinions you might want to visit my poor neglected blog http://cg59.blogspot.com/.

If you plan to sell a home this year, I highly recommend you get professional help. I’d certainly love to answer any questions you may have!

-Eric Woolhiser
EXIT Advantage Realty

A settlement of $325 million was recently reached between Ameriquest and 49 states with Massachusetts receiving $12.2 million. Ameriquest, previously known as Long Beach Mortgage in the nineties, is a sub-prime lender, meaning that they lend to folks with less-than-good credit. While it's expected that the lower your credit, the more you might pay, Ameriquest was alleged to have practiced unfair lending practices.

The states allege that Ameriquest had concealed interest rates and fees, falsified home values and inflated applicants income statements so that individuals would get larger mortgages, therefore incurring larger closing costs. In the past, Ameriquest has been accused of charging the elderly and minorities more points than other customers.

For a great article with more details, click on over to Boston.com to read "Reilly urges consumers to avoid Ameriquest."

In Massachusetts, Ameriquest ranks 37 in foreclosures, but was previously as high as 11 with a large quantity of foreclosures in the first quarter of 2005. Many of Ameriquest's loans are handled by Deutsche Bank National Trust. 60% of their foreclosures are Single Family, 29% are Multi-Family and 7.4% are Condominiums.

My personal experience was that I have worked a loan application with borrowers in Gardner who had Ameriquest loan. Given the borrower's FICO score and situation, I would have been able to offer a 2/28 adjustable at 7.5% for a start rate. Ameriquest had given then the same loan, but with a 9.5% start rate. Because of the pre-payment penalty that is common with 2/28 ARMS, the 2% savings I could have given would not be equal to the pre-payment penalty. These borrowers would have welcomed the lower rate with me, and most anyone else would have re-financed them, but I didn't think it would have helped them in the long run, and I refused the loan.

My personal reputaion is worth more than an easy loan.

Also, I have decided not to originate any more loans, and have been referring them off to people who will do as good if not a better job than I would have done.

Home Resales Down from Record, Price Gains Continue to Roll

RISMEDIA, Aug. 23, 2005 — Existing-home sales declined in July from a record in June, but home prices continue to rise at double-digit rates, according to the National Association of Realtors®.

Total existing-home sales— including single-family, townhomes, condominiums and co-ops—slipped 2.6% in July to a seasonally adjusted annual rate of 7.16 million from an upwardly revised record of 7.35 million in June. Sales were 4.7% higher than the 6.84 million-unit pace in July 2004.

David Lereah, NAR’s chief economist, said home sales remain in historic territory. “The level of existing-home sales in July was the third highest on record,” he said. “This is a big number any way you slice it, and housing is continuing to stimulate the overall economy.” The second highest level of sales activity ever recorded was in April of this year, with a pace of 7.18 million units.

Read More

100% Financing for 550 FICO!

Just this past week, one of the lenders we broker mortgages with has announced a program that will give 100% financing to 575 borrowers.

I find this to be a startling announcement. Since I have been in the business, sub-prime lenders were requiring a 580 FICO for 100% financing. Most still do, but as I browse through weirdloans.com, sort of an online Scottman's Guide - I even see lenders with 100% financing for 550 FICO scores!

Consider what this could mean as an economical indicator:
A bank is loaning money against a property with out any equity at all, and the guidelines are relaxing. Yes, rates are going up
slightly, but FICO scores are a very accurate prediction of foreclosing rates. Banks are still hungry for debt, and what they seem to be banking on is that if they were to foreclosed within the next 24 months on a borrower, they believe there will be equity to protect their investment in the future.

Of course, the bank can rig the game a little by bringing up everyone's rates so that the minority of foreclosed are insured by the non-default borrowers. But those risks are calculated over and over again, and now the trend is for sub-prime lenders is to increase risk so they can buy more debt. I'm convinced that the banks are expecting more appreciation.

The National Association of REALTORS® is still predicting that towards the end of 2006, there will be positive appreciation nationally in the 3.5 percent range.

Yes things are cooling off prappreciationnnon, and it's time to stop speculating on flipping properties, but for someone who has a good purpose for their property, (i.e. primary occupancy, or rental income) things still look healthy from my chair.

EXIT and Jeanette Tighe

August 12 – Jeanette Tighe has been named vice president of EXIT Realty of New England. She joined the company in August, 2004 as a regional director.

Tighe holds the National Association of Realtors designations in CRB, CBR, GRI, LTG, QSC and SRES. She was awarded the Eastern Middlesex Association of Realtors, 2000 Realtor of the Year, and the Massachusetts Association of Realtors - 2000 Realtor of the year. She has been president of the Eastern Middlesex Association of Realtors and the Women’s Council of Realtors. She also has been chair of the Eastern Middlesex Real Estate Academy.

Currently, Tighe is on the board of directors for both the local and state associations of Realtors. She has been the Massachusetts Realtors Political Action Trustee for the Massachusetts Association of Realtors. Tighe has been appointed as the Focus Vice President of Government Affairs for the state association .

Tighe also is on committees on the national level of the Realtor association.

She is a very active participant for Angel Flight NE, based in Massachusetts, and a volunteer in the fight against breast cancer through Dana Farber Cancer Institute. And she participates with juvenile diabetes and Habitat for Humanity.

Tighe has the responsibility of growing the company, helping the broker/owners expand their offices and assist with coaching and training within the company.

EXIT Realty International was founded in Toronto, Canada in 1996 by CEO Steve Morris, a 26-year industry broker. Tami Bonnell saw the opportunity and bought the rights to New England immediately. She recognized that EXIT’s unique approach was the solution she was looking for and went on to become the president of EXIT Realty Corp’s U.S. operation based in Burlington, Mass. In six years, she has franchised 28 offices in New England.

Tighe is based at the EXIT corporate office at 67 Bedford St Burlington, Suite 400 West and can be reached at (978) 273-0587. Or at the EXIT Premier Realty office - (781) 270-4770.

For more information, visit www.exitrealty.com

Congrats, Jeanette! We're thrilled with the leadership in this company! -Eric

Bay State Housing Bubble?

Reprinted from the Massachusetts Association of REALTORS®:

Bubble theorists overlook Bay State’s lack of housing production

New data from the U.S. Census Bureau shows that Massachusetts is adding housing more slowly than nearly every other state in the nation, and the lack of new housing production since the start of this decade is among the key factors contributing to the sharp increase in local home prices since 2000. While speculation over the existence of a housing price “bubble” appears to grow every day in the news media, these reports, for the most part, overlook the economic fundamentals of supply-and-demand at work in the Bay State housing market.

Notably, last year, single-family home sales set a record in Massachusetts, and three of the top five years for home sales in the Commonwealth have occurred since 2000 – triggered largely by low mortgage rates and strong demand from baby-boomers and minority and immigrant buyers. During the same time period, the number of new housing units has grown just 1.9 percent across the Bay State, compared to 5.8 percent nationally.

The result has been steady gains in home price appreciation. The average selling price for detached single-family homes and condo in Massachusetts has risen 47 percent in five years, from $261,293 in 2000 to $385,755 in 2004, with double-digit price appreciation occurring in three of those years and four times in the past six years.

While investor activity has increased during this period and new mortgage products have been developed to allow buyers to purchase more home, the upward pressure on prices is due largely to a constrained housing supply. Although multifamily housing starts have doubled in recent years to nearly 7,000 units annually, single-family housing production remains well below existing demand, primarily because of restrictive zoning laws and cumbersome permitting processes, REALTORS® and other housing advocates note.

Gov. Romney has vowed to substantially increase housing production during his term in office, to twice what is was in 2003 when he took office, but the challenge has proved greater than initially thought. Half way through his first term, total housing permits have increased just 29 percent, from 17,465 units in 2002 to 22,477 units last year. The inventory of homes and condos for sale may be up sharply over the past year – by more than 9,800 units or 24 percent – but that’s largely the result of today’s more modest sales pace and existing supply that has not been priced properly to sell. New housing remains slow to come on to the market.

Significantly, predictions that home values will fall – such as the PMI US Market Risk Index that puts greater Boston at a better than 50 percent probability for experiencing price declines – fail to account for the local regulatory and land use policies that severely limit new housing development in the Bay State. The more likely reality is that home prices will continue to increase, just at a more modest pace – like the 5-6 percent annual appreciation in median single-family home values observed statewide from April-June.

MOTIVATED SELLER! BRING OFFERS!

One of my biggest pet peeves about other REALTORS® is when they write stupid things like that into the description of the listing.

Here are some actual examples:

"BRING YOUR FIRST TIME BUYERS GREAT STARTER HOME, 8 RMS, 4 BDRMS COLONIAL, LG LR WITH PINE FL INDER WW. NEW HEATING SYSTEM JUST INSTALLED, LG SHED W/ ATT'D SCREEN HOUSE. MOTIVATED SELLER, BRING ALL OFFERS."

"Fully remodeled 3-4 bedroom home, nice yard, view of Lake Whalom. Too many updates to list. Come take a look! RECENTLY REDUCED, MOTIVATED SELLER SAYS MAKE OFFER, WILL HELP WITH CLOSING COSTS!!"

"$1,000 bonus to selling office if UAG by 6/10/05. Don't miss this one! Act quickly!! Commuters and Gardeners! 2.03 acres of perennials and greenhouse! Minutes to Rt 2, 190 and commuter train! Oversized 2-car garage. Vaulted ceiling spans front room from one end to the other. Custom cherry cabinets, granite counters and brick work warm the kitchen. Seven skylights enhance brightness. Carefree tile covers all floors. Fenced yard, jetted tub, new roof, new water system. "

"MAKE AN OFFER!Motivated Sellers!Fabulous Colonial walking distance to downtown.This home has 4-5 bedrooms, 1.5 NEW bathrooms, new furnace, new 60 gallon hot water tank, new 200 amp electrical service, kitchen has new countertop and new pergo floor, 2 new porches,5 car driveway, 2 oil tanks,1st level family room has hook up for wood stove.Finished basement offers a wonderful custom built bar and family room.Good size level backyard offers plenty of room for your summer parties and barbeques"


Here's my beef with it:

First as a fiduciary, you should never speak about the seller's motivation unless it is public knowledge. An example would be a seller who is in foreclosure and the noticed has been filed in the papers or recorded at the courthouse. In that case you may as well tell a buyer's agent. "Well the seller is in foreclosure, he owes thus and so, and we need to sell at thus and so."

However, if the seller's motivation is NOT a matter of public record, you best not let the public know because you've weakened the seller's position. If the seller is truly motivated then lower the price to about 95% of its fair market value. Say you're motivated with the price. If your house is over priced, then any amount of begging won't help you. The market will not take pity and buy the house at your price just because you're a loud beggar.

To say that you will consider all offers is redundant. First, by law, you have to present every offer to your seller even if it's only for a dollar. - that brings me to another thought, but we'll get to it. -

To say that you want offers is silly! You would not put it on the market if you didn't want offers, is that right? Price it right and the offers will come, the market is educated. If you present a good value, the offers will come.

Oh and about this cash back at closing nonsense! or cash back if you make an offer by a certain date. That's stupid too! Do you know where I find that kind of language? I find them on listings that are just about to expire. The agent is making a last ditch attempt by offering a portion of his commission to the buyer, because he knows he's done such a poor job the seller would never extend or re-list with that agent. He figures that if he can't hook a buyer before his contract is out, he's not going to get any money out of the deal. You know, half a loaf is better than none.

Buyers, and Sellers, when you see an agent do something like that, make a note and put it in your list of agents you wouldn’t possibly hire! Their license is not worth the paper it's printed upon!

Another thing I HATE IS THE USE OF ALL CAPS IN THE DESCRIPTION! Unless your MLS is so antiquated that you have no option but to use all caps, stay away from that. If you want to be known as a strong negotiator, start with approaching the market with a cool, clear, and rational head.

USING ALL CAPS REMINDS ME OF CHICKEN LITTLE, TELLING US THE SKY IS FALLING!

In Negotiating 101, most of us learned that the party who can most easily walk from the table is the party in the stronger position. If you begin your relationship by advertising your desperation, you won't do very well.

Getting back to presenting all offers, I want to make a point here.
First, it is the duty of the listing agent to always present every offer to the seller. It's the law: so don't fool with it.

But here's the point a lot of lawbreakers don't get: If your house is over priced, and you are getting low offers, you should present them to the seller. That's valuable data! Consider that this will prepare the seller for the dreaded "I think we're over priced" conversation.

First of all it shows the seller, that you have taken offers. Secondly, as these offers come in, a consensus of opinion is forming around these low offers. So you present to the seller, "Well Mr. Seller, as you can see, the best offers we are getting are these. We can do one of three things, 1) accept one of these offers, 2) reduce price or 3) come off the market until the day that your price is supported by actual market prices."

So my final point is, if you are a motivated seller, reflect it in your price. If you want a quick sale, reflect it in your price. If you are about to expire, get a price reduction before you do, and if you don't, don't injure your reputation by telling the world that you will compromise your commission. Even though it's in code, the market is a lot smarter than you think, they'll figure it out or some REALTOR® smarter than you, will point it out to the world.

Car Fire

This weekend was a little more exciting than most.

I was following my wife Laura on the way to a little league game in Littleton, and as we were breaking in a new van, we were keeping it under 55 MPH. We were East bound on Rte 2 just before 495. The accident occurred about 11:00 am 5/28/05.

Laura was following a fellow who was towing a bobcat behind his pickup, and he started to fishtail and lose control. Laura slowed down, because she didn't think he would recover.

He didn't.

He rolled his truck 90 degrees onto the driver side. So I ran up with a couple of other guys and we opened his passenger side, and he climbed out on his own.

However, the fuel line had broken, and a fire started. After he was out, I ran back to my car and pulled out my camera, and snapped 120 photos.

Some of the photos are published on the Harvard Massachusetts Fire website. They reduced the resolution considerably from the 6 Megapixels I took them with. I guess they wanted to save on bandwidth.

Harvard fire was also kind enough to give a link back to my REALTOR® website, woolhiser.com too.

If you'd like to have any of the originals, let me know.