Gary White FlexIt Realty~Real Estate & Updates, Grand Rapids & West Michigan

Just another open house, or so I thought.

I advertised my open house 3 days preceding the actual open house with three different ads displaying the date, time and directions with contact information and a slightly different spin on the property.  I also placed a cable ad with the open house information and a 3 photo display of the property.  In addition I noted on the MLS the open house dates and on my web site as well.  I placed the direction signs and open house information on the key cross streets and main streets directing passersby to the property.  I do this several hours early to attract those that attend church at the later service and drive by the area.  I also have a prominent ad in the Sunday newspaper in the key section for the property.

I waited to put the open house sign in front of the property but I do have a sign identifying the property with open today sign noting the times.

I showed up early to place my open house sign out and turn the lights on and ready the home for the open house, my normal routine.  The next door neighbor comes across the yard to greet me.  She says, "how come you did not tell me your were going to hold an open house today"?  I am sorry I didn't think it was important for me to notify you of my open house schedule.  Would you like to be notified?  "Yes", she responded.

   Here is the rub with this situation.  The neighbor is selling her property as a FSBO and wants to piggy back off my advertising dollars.  Now she knows me and has discussed listing with me BUT never quite lets it happen.  Now I could have responded in a completely different way but she is trying to sell and she also is doing it on a limited budget and thinks she can do it.  So......

I tell the neighbor, "I am sorry, are you listed with me"?  You see I sell properties I represent first.  These people are paying me to sell their property.  I also represent buyers...I took the time and previewed your home already.  If I have a buyer that expresses interest in a home like yours I will contact you.  I wished I had time to represent everyone that needs help for free but you know that is not practical.  I doubt you would accept a Realtor that stopped by and said....I'll sell your home for free......we both know services are worth what you pay for them.

I point out to the FSBO neighbor some of my marketing efforts.  If you happened to notice I placed ads on cable, newspaper, Internet, magazines, direct mail and emailed buyer agents as well.  Representation is worth what you pay for it.  You have chosen to represent yourself and I have given you tips and respect your decision.  I hope it works out for you.  Please do not be angry with my clients who have selected the alternative of professional representation.  I just represent clients that hire me....so do not expect me to contact you with my open house advertising schedule.  I am busy representing people that hire me.  Have a nice day!

I went into my open house listing to get it ready.

I had about 8 couples show up for the open house.  None went next door.  She put her sign out and sat on the front porch....staring at every prospect as they came and went. 

At the end of the open house the FSBO neighbor came over and said...."looks like you had a few people stop by today, any buyers"?  My response, "they were all buyers or they would not have stopped by...I have one couple to follow-up with on Monday.  How did your open house go"?  She said, "they looked and never came in".  I felt sorry for her.  New agents have this happen too if they do not do what it takes to attract buyers.

Then out of the blue.....she says,"can we make an appointment?  I think it is time for me to list my home". 

   We have made an appointment for Tuesday.  We'll see if the third time is the charm!Maybe I can put a smile back on her face. 

How do you handled FSBO's that want to piggyback off your advertising?

The midwest housing market one of the Nations best buys. 

The Today show with Matt Lauer hosted a segment reporting the Midwest as one of the nations most reasonable places to live and purchase homes in the current market.

Further showcased was Grand Rapids, Michigan in a feature outlining home values.  I have provided a link to the segment so you can view the segment that aired this morning

http://www.msnbc.msn.com/id/20874580/

This is a video link provided to the public by msnbc.  The link is there material and may not be copied without specific permission from msnbc.

The segment outlines several areas of the country and gives very good examples of how the Midwest housing market fairs compared to the rest of the country with a focus on Grand Rapids, Michigan and other key markets.

I thought you would find this interesting considering the information is hot off the press...today.

Let me know your thoughts. 

Homeowners Associations, this brings all kinds of thoughts to peoples minds.

This is a love hate relationship.  Homeowner associations were created to protect property values, to create a control element for construction size, shapes and colors.  This helped to insure nothing would be produced to large, to small or later be painted in a color to hurt property values of other home owners.  These little communities of rules gave a uniform instruction guide for all residents to follow.  Some associations had more rules than others.

The love part was maintaining the look, the feel, the value for each resident.  This can be in free standing condo type setting or single family residences.  These rules offer security in the knowledge that the little slice of heaven the owner calls home will remain "as is" unless the board or majority of the residents want something to change.

The hate part was for some resident they found the rules to confining.  The rule vary but in many cases only certain days can a trash can be left out.  Cars may not be parked outside or the garage door left open more than an hour.  No for sale signs may be used if you are selling your property or condo....how do people find out yours is for sale?  Many times if you are in a gated community a potential buyer can not drive by either.  Some like this feature other hate it.

You can only paint your little abode with approved colors.  You can only plant approved trees or plant types or bushes.  Fences are allow with approval or never allowed depending on the rules.  You may have to maintain some areas of your property and not others, depending on the rules.

You may be hit with special assessments for something you could care less about.  If you use the community pool then resurfacing the pool would be fine.  On the other hand if you never used the pool you would have very little support for the resurfacing assessment.

I have lived in both and found them to be good and bad.  The fact remains you have choices so find out what the rules are and read them "BEFORE" you purchase.  After you have purchased and decide the rules are not what you thought it is simply to "late".

I have a little policy....read before you leap, that first step can be a killer if you do not know the rules.  Most associations have to be notified when you sell and the new buyer also has to initial or sign the association documents before close.  Read them....you will be glad you did.  I make all my clients initial the association rules and provide a personal copy for them.

I hope this gives you a better understandingof the why and how you can love and hate aassociations.

Foreclosure terms, "Cash for Keys" 

You may not have heard of this term.  Cash for keys....is a term that describes what happens when a lender forecloses on a property and then sends out a representative to get you out of the property.

This happens before the redemption period has run the time you are allowed under the law to redeem and occupy the property.  This usually happens after the foreclosure or Sheriff's sale has taken place in Michigan.

"Caution" Other states do not have the same foreclosure laws as Michigan so check your laws because Michigan laws will not apply.  Some states such as Colorado the redemption period has passed before the actual foreclosure proceedings take place or Sheriff's sale.

Once the bank or lender has legally foreclosed on your property you no longer own it!  You do however under Michigan law have a time frame to get it back.  For residential under 3 acres that is 6 months.  The costs vary depending on how many payments you missed, also include the interest you accumulated along with legal fees and court costs.  But you can get your home or property back and have six months to do so.

Here is one of those little known facts.  After you have been foreclosed on you can occupy and live in the home for 6 months rent and payment free!  You read that right.  You do not own the property, you do not have to make house payments and you do not have to pay rent to stay.  You will have to pay your utilities if you want lights, water, heat and air conditioning.

So....here is what happens.  The lender immediately sends out a representative and offers you cash....an amount equal to the first and last month rent for you to leave and give the lender or note holder the keys.  This is where the term "Cash for Keys" comes from.  If you leave the property and give up the keys the lender or note holder can immediately market the property and you forfeited your redemption period with a signature and a little cash. 

This works well for some people and hurts others because they could have sold the property during the redemption period and pocketed the profit after the lender was paid off.  Now if the sell price profit is lower than the "Cash for Keys" price the foreclosed party would have been ahead to take the cash and leave.

You have to evaluate your situation with an experienced real estate professional before making a decision.  You also have to act fast so you have some time to sell if that is your course of action to save your credit from being hit with a foreclosure bad debt on your credit score.

I hope this has given you a little more insight into the foreclosure process with another term you will hear from time to time.  If you have questions call your career real estate professional for answers.

Recently I have heard more agents say "sellers" do not understand the selling process.  They have this mis-guided thought that I can accomplish whatever they ask me to do!

During the listing process we help "sellers" understand the current market.

We offer:

1. We provide current market data for pricing which includes, sold, listed and pending properties along with expired listings.
2. We offer suggestions to arrange the home for better showings.
3. We review curb appeal.
4. We discuss how showings are conducted.
5. We arrange marketing materials that display the listing to it's best advantage.
6. We distribute listing notifications through various media outlets.
7. We produce video and slide presentations to review the property.
8. We discuss offers what types of offers to expect, how to react to offers, when to counter offer and much much more.

We are hired to "market and sell" client property.  So why do agents think "sellers do not understand the selling process? 

     Maybe agents think this for the following reasons:

1. Sellers ignore market data when pricing property.  Do they believe the agent does not know "their" property or the properties features?  Therefore the agent is under valuing or over valuing the property?
2. Sellers ignore suggestions on how to show the property....they know how "they" like it. Sellers do not know how the general public will perceive the property as well as agents who deal with listing and selling properties everyday.
3. Sellers seem to not realize the importance of curb appeal.  Kids toys are all over the front yard, that dead hanging plant is still on the porch, those stacks of magazines and newspapers are still in the corner...just haven't had time to drop them off to the paper recycle place.
4. Sellers tend to still be fussing with things as the buyers are pulling up, so the sellers engage the buyers in some friendly conversation.  The sellers to tell the potential buyers how they couldn't get everything done....oh and that repair, I am going to fix that this weekend!  It is something I have been meaning to do for a couple years but this weekend I am going to fix it!  The buyers look at their agent and say, "what repair was that"?
5. The agent has provided extra color brochures but the seller has them in the house, don't want the neighbors to take them!
6. The sellers didn't have time to do the dishes before the showing....do you think the buyers will look in the dishwasher?
7. "WOW, we got an offer"....they ask their agent, "how much"? (first question)  The seller responds with, that's to low or forget it, I don't even want to discuss it.
8. I don't have time to show them the house again...they have seen it once can't they make up their mind?

Some of this is caused by agents not explaining the process in enough detail and in a format for sellers to understand.  This is also caused by the agent not developing the professional presence so the buyer has faith in the agent they hired.

I had a seller tell me their agent was "cheap" but it doesn't matter he (the seller) is doing all the work!  Why hire an agent if you don't trust them?  I am am not cheap....I don't offer cheap services either!  I earn every penny of what I charge and more.  If sellers do not understand the process and help you as you contract states..."the seller will have the property ready to show".  This is based on reasonable notice that the seller and agent work out.  The seller should take the time to analyze offers and not take them for face value.  I have had offers that seemed low until you reviewed the fact that the buyer was allowing them to stay in the home rent free 90 days after close.  The seller thought that was no big deal until I explained that he didn't own the house after close....the buyer did!  That means something.  It also means something when the offer is near full price but the buyer wants your $5000.00 lawn equipment, all your curtains, shades and the washer and dryer.

I have kept this list short, but you get the idea.  Understanding and cooperation will sell homes, in any market.  So do your clients understand the process or are they on this list?  Is this your agent?  Maybe some communication is necessary to get your home sold! 

  One of the most contested issues that can cause tempers to flair is a dispute over earnest deposits.  You want a migraine....deal with two sides that both think they have been had!

The contract outlines how the earnest deposit can be retained and relinquished if the buyer does not follow the contract.  Yet many buyers are surprised when the seller says.....I want the earnest deposit. 

How does this happen? 

1. Simply not understanding the contract.
2. Not having representation that can guide you through the contract.
3. Poor representation.
4. Disregard for the contract, thinking the seller would not claim the deposit.
5. Contract language that requires forgiture of the earnest deposit if certain conditions are not met. 

Not understanding contract is probably one of the most common reasons for losing an earnest deposit.  Contract can be complex and vary from state to state.  So if you live in one state and move to another it is very likely what you knew in one contract may not apply in another state.  Contracts themselves can vary and if you allow yourselves to use "Store Bought" contracts you should be prepared for a mess.  These contracts are vague, lose and most attorney's will have a field day....and snicker all the way to their bank with your money!

Not having proper representationto explain the contract in detail and protect your interests.  If you are buying from a FSBO.....do you give the seller the deposit?  Not if you are represented...the your buyer's agent holds the deposit in escrow.  Do you have to give the FSBO the deposit....no you can have it held in escrow at a title company or by your attorney.  Will the FSBO like it?  Probably not but they will live with it. 

Poor representation,hiring representation without the proper training and experience can be disastrous.  There are many professional "career" Realtors who will watch out for your best interests.  Protecting you from errors that could cost you your earnest deposit.

Disregard for the contracts terms and languagecan cause you to lose your deposit.  I have seen pepole think they can do what ever they want and whenever they want.  Wrong, if someone has strong representation and they know the contract language you could lose your deposit, plain and simple.

Additions to existing contract language can alter a contract terms setting new conditions.  The most common is if the home is not purchased and closed by a certain date.  This is much like an option to purchase.  You offer your earnest deposit as an inducement to keep the property off the market while you sell your existing home and put a future close date in the contract.  If not closed by that date you lose your earnest deposit.

There also is a cute little item called the "non-refundable deposit".  I like this a lot "if" I am a seller's agent.  I never allow my buyer's to do this however!  You want something bad enough this looks like a way to get it...usually it is trap....and if you do not perform the contract language to the letter you lose your deposit.

Most of the time people do what they are contracted to do....but when they don't disputes arise and the remedies are they to settle disputes but usually it is a very unhappy experience for both parties.

I hope this gave you a little insight into earnest deposits.

When homes are on the market a long time...some sellers just cave with the first offer.  They are so concerned that they will not be able to move on with their lives they take the first offer they get, sometimes the "only offer"!

Sellers have reasons for selling.  As buyers agents we do not know those reasons.  As listing agents we should be very aware of why the seller wants to sell so we can represent their interest properly.

Some reasons for homes sitting on the market are just simply priced to high to begin with.  Other reasons are the location, condition, layout, fixtures or lack of amenities for the price range.

One of the other key reasons for a hometo sit on the market month after month is the lack of marketing.  It can be priced right with a great location, all the features are there but the curb appeal is just not there.  I recently helped some young buyers purchase their first home.  The home we purchased was not represented or marketed to display to property in it's best interest.  The front tree and bushes were over grown making the front of the home almost invisible from the street.  The MLS only had the single front photo, no inside photos, no rear yard photos....just lazy representation.

It was over priced, what I call, the agent bought the listing.  This is done by telling the seller they can get more than the property is actually worth.  The other listing that stays on the market is when the seller sets a sell price with emotions believing the property should sell for more than other homes because they "know" it is worth more!  Shame on the agent for taking this type of listing and giving the seller false hopes!

We did our homework, we knew the competitive prices, we put a narrative together so the agent had reasons for the price.  The offer was rejected flat out!  When I questioned why because it was very reasonable and not insulting or low-ball.  The sellers agent said the seller thought we had made up the information to get a lower price!

I thought to myself....I was going to have to do work for both my buyer and the seller's agent.  So I asked to present the offer myself....the seller's agent didn't even show the seller the narrative.  The seller's agent said no way....well this is not for the seller's agent to say....did you know that?

I did presentand showed where every section of the narrative information was gathered and why the price was fair and reasonable.  Two days later the seller agreed.  My buyers had smiles that are probably still on their faces.

Marketing, representation and detailed reasons can make a huge difference in offers being accepted and rejected.

Do you get your offers accepted or are you in a flurry of counter offers?

This is a question that should not need to be asked, but with recent events in my own search to purchase I have been exposed to more sellers and agents that have limited market knowledge.

  It is very difficult to market a property if you only have media knowledge.  The television, radio and newspaper personalities that spout statistics may not even be using information from your area!  They may be looking at a general statistic from a wire service.  Local stations may have a myopic view purported by a broker that works a specific area and then generalizes about the metro market....making the listen or reader feel this has to be correct!

The truth is within a market is a variety of markets some are flourishing and others are struggling to hold prices.  If you generalize the trend can look very different from reality.  So use your tools to know your market, your "real market".  Your resources on the MLS tell you new listings, sold properties and the spread from the list and sell price.  You should also, as a professional, have access to the expired listings.  So now you have part of the story...if you stop here you still will not know your market.  You will know the basic market or area.

Take the next step for your clients.  This takes time and it is worth every second you take to do it, in my estimation.  Preview the comparable listed properties.  This give you immediate first hand knowledge of the competition.  You can compare location, condition, and price very quickly.  Some of the comparables a drive-by can tell the story others you must go through.  Now you are using real market knowledge...not media knowledge.

I use one of my staff members and we even go a step further and check tax and purchase records to see if the seller has more margins to negotiate with than our clients.

Are you using media knowledge or market knowledge?

If you have been reading my posts you may know I have been both a seller and a buyer's agent lately.  Not just for clients but for myself as well.

It is interesting and my wife is now my client and spouse, not a good client but a great life partner.  I do the same methods of representation for myself as I do for my clients.  I pay attention to the information that is presented to me.  I have the same gripes when I represent myself as I do when I represent clients.  I thought it would be different but why should it be?  I am doing the same thing.

I was ready to write an offer on a home.  I had done an exhaustive research, talked to neighbors, collected all the data when my wife says...."we should just go to this open house".  She continued, "we both liked this house but the photos turned us off, so we moved on.  She was right, the agent did not present the home very well the MLS narrative was uninspired, the photos were out of focus and very few less than 10 photos for a 4 bedroom home on 2 acres with a walkout, a waterfall and ponds, creek.  The photos concentrated on the kitchen, formal dining area a distant shot of the waterfall and partial front photo.  I read the room layout and moved on....saying next to myself.

We went to the open house.  As we entered the neighborhood it looked nicer than expected.  We turned down the street to the home which was centered on the cul-de-sac...with nearly a 2 acre lot out the back door.  We entered the front door and the agent greeted us with a handful of documents....I handed her my card.  I introduced myself and my wife....so said with a groan another agent.  I kind of chuckled and said do you want your "stuff back"?  No....she slumped at the kitchen snack bar and then she said, "I just hung up the phone from my sellers, she just has to sell....she has cancer".  My wife and I offered our sympathy then the seller's agent says....we are going to drop the price $50,000.00 tomorrow.  I did not comment on the statement.  The seller's agent adds, "I have known these people for years, do you know they have over $90,000.00 invested in this home above the list price right now and they are just bleeding dollars and are just going to drop it again to sell it.  I knew the builder, so on the way back to the office I made a quick call, he confirmed the construction price.

My wife and I blew off the other home we were going to write the offer on and immediately wrote one for this year and a half old charmer that had everything we wanted and more.  The truth is we would not have written our offer as low as the agent told us they were willing to go.  They lost $25,000.00 over that conversation.

   This is a big Oops!  If the agent would have said the sellers have health problems and will consider offers....I would have still written higher based on the homes value, condition and location. 

The best part is I wrote the offer for exactly what the agent said.  I didn't try to be greedy, my wife and I could not feel right about taking advantage of such a serious health problem.  Sure the agent could have been acting for an Academy Award but we also knew the agent and her reputation.  She has 37 years in the business and just tells it like it is!  This time it cost her clients.

We had the offer faxed to the agent within an hour of leaving the open house!  Want to know the best part....the agent mis-quoted the sell price....the sellers were only going drop it $30,000.00 not $50,000.00!  I always write a little narrative with my offer when they are lower to help the other agent justify to the sellers the offer.  This offer was no exception.  I explained the market and that if the price would have been published on the MLS it would likely bring offers lower than the new listing price.  I used some of the recent sell prices in the area to demonstrate this fact.

The sellers accepted our offer as written.  You can only share information that works in your clients best interest, this little Oops worked for me not the seller!  Yes it met the need of the seller; but if the sellers would have known how I came to write that particular offer they would not be happy!

Our words can cost our clients money or our words can make clients dreams come true. 

Have you had someone tell you to much?  Oops is a bad word, if a doctor says it we ask what's wrong.  If a Realtor or seller says it, it costs somebody money!

I have been dealing with more clients that are selling and buying in the foreclosure market lately.  The price ranges cover the spectrum.  This problem with foreclosures is not limited to lower income families or people that just don't pay their mortgage.

The term redemption period is the length of time the person that had their home foreclosed can buy it back.  Just because a home is foreclosed does not mean it is gone without a way for the former owner to buy it back.  The truth is they are not the former owners until the redemption period expires.

Here is a little outline...the bank or lender says....you have not paid your mortgage and we are going to foreclosure or simply take the back the property that you used as collateral against the loan.  Now anything under certain acreage sizes like 3 acres or most residential property has a redemption period of 6 months over that acreage has 1 year.  That is in Michigan I do not know other states and am only considering residential.  commercial and multiple housing units over 4 have other issues.

So this means you can buy your property back of course attorney fees, accumulated interest and back payments apply to the buy back amount.  This is just one of the options you have.

If you are facing foreclosure do not wait as soon as you know you are in trouble consult someone with knowledge that can help you.  Keep all your paperwork and be ready to act.  You can save your credit if you act.  I hope learning terms can improve your foreclosure knowledge.