Thursday, July 14, 2011
technology issues
Realtors in my market place can set up fantastic personal web sites tailor made with specific search criteria for buyers (also useful for sellers). My Austin Board of Realtors (ABOR) deserves the credit for the technology. This tool is, well, a great tool. The data provides price changes, picture additions, details on the home - this technology provides almost everything a buyer wants for a first glance. I think there could be an argument of providing too much dependency on this one tool. Buyers want and should get the information. The issue I see from time to time is a buying principals getting overwhelmed with options from the updates. This personal web site I mention sends the data to emails. With mounting pressures at the office or at home with kids, it can be hard to look through the list of options. This is especially true in todays high inventory market of listings. If your a buyer, make sure and get into a car with your Realtor to open up doors in your ideal target area. Look through homes with your Realtor. Let that Realtor do the driving while you look at the neighborhood. Chances are good that you have chosen a good Realtor and this professional will listen to your feedback and criticism of the homes you see together. Having direct contact with your Realtor while viewing homes creates a platform of consistency for the eventual decision. It can be tough for a Realtor who wants to provide assistance in narrowing down the search if they don't see a minimum number of homes together with their client. This will aid in not missing a really good property/home that might just have bad pictures - it was raining - the copy is poorly written. The web site is a great tool to support the process. But somethings can't be beaten by technology, and this is one of them. It also goes back to a core value in working with a Realtor. I can't think of another comparable service in a sales situation than that of a Buyer Agent Realtor working with their buyer principal. The builder has their own sales force - for the builder. The car dealer has their sale team - for the car dealer. JC Penny has a sales team - for them. Realtor is a personal shopper to some degree. This connection is best utilized when buyer and Realtor are together looking at homes. Can you think of another service in a sales situation?
Friday, July 8, 2011
Loyalty reciprocation
Reciprocating for highest/best loyalty
While driving I caught my 7-8 minutes of sports talk radio with an interesting discussion on loyalty. The syndicated host of the show mentioned he has "stand alone" loyalty to his wife and kids. Nothing else gets his undivided loyalty.
The host went on to discuss that he does have loyalty to others and his work, it is just 'conditional loyalty'. He was separating 'conditional loyalty' from 'absolute loyalty'. He explained his 'conditional loyalty' at work reflects the loyalty his boss/owners of ESPN show him. In summary, this radio host was saying that he reflects the same loyalty he is shown.
This discussion got me thinking of "loyalty" in my line of work. But how does it start & how does it get on track for a great buying experience? My industry as it relates to "Agency" thrives on the degree of loyalty involved. Both principal and salesperson/agent/Realtor seek loyalty from one another. Through this loyalty comes open communication and trust. Good communication leads to great discussion which leads to informed decisions. Considering my line of work (an agent, Realtor for others through sales) it is interesting when I personally don't trust a salesperson through other endeavors. I know I have had obstacles to giving my loyalty with car purchases, remodeling jobs with contractors and cell phone stores. It even shows up when I am looking for a simple shirt at a store - "no thanks, just looking". If I don't feel a sense of loyalty from the sales person, it is hard for me to give it back to the sales persons. This scenario plays out to where I can't allow myself to be helped because I am not comfortable opening up with what I want and what I expect. This is a fascinating scenario for me because I am on both side as both the customer at times and the salesperson.
Have you ever had doubts about the loyalty towards a salesperson only to realize it was your own trust issues in general?
While driving I caught my 7-8 minutes of sports talk radio with an interesting discussion on loyalty. The syndicated host of the show mentioned he has "stand alone" loyalty to his wife and kids. Nothing else gets his undivided loyalty.
The host went on to discuss that he does have loyalty to others and his work, it is just 'conditional loyalty'. He was separating 'conditional loyalty' from 'absolute loyalty'. He explained his 'conditional loyalty' at work reflects the loyalty his boss/owners of ESPN show him. In summary, this radio host was saying that he reflects the same loyalty he is shown.
This discussion got me thinking of "loyalty" in my line of work. But how does it start & how does it get on track for a great buying experience? My industry as it relates to "Agency" thrives on the degree of loyalty involved. Both principal and salesperson/agent/Realtor seek loyalty from one another. Through this loyalty comes open communication and trust. Good communication leads to great discussion which leads to informed decisions. Considering my line of work (an agent, Realtor for others through sales) it is interesting when I personally don't trust a salesperson through other endeavors. I know I have had obstacles to giving my loyalty with car purchases, remodeling jobs with contractors and cell phone stores. It even shows up when I am looking for a simple shirt at a store - "no thanks, just looking". If I don't feel a sense of loyalty from the sales person, it is hard for me to give it back to the sales persons. This scenario plays out to where I can't allow myself to be helped because I am not comfortable opening up with what I want and what I expect. This is a fascinating scenario for me because I am on both side as both the customer at times and the salesperson.
Have you ever had doubts about the loyalty towards a salesperson only to realize it was your own trust issues in general?
Thursday, July 7, 2011
Where to have the "first meeting"
My wife and I were updating our life insurance and it required taking blood and other aspects. To do this we had to meet a nurse representing the insurance company. I was surprised to have an option to meet this nurse at their office OR have them come to our home. I took a home visit because it was easier on me.
The home visit was a good idea I thought, but it became complicated for all of us and slower. The nurse needed some additional forms which put her on our computer. We had printing issues with the program and my kids were fussing which is always tough with business at hand. Taking the nurse out of her office for a home visit took her away from her office where she had everything to perform her work and expedite our meeting. Our meeting took longer and required me/my wife to do some extra work. Almost every time I meet someone away from my real estate office it does not go as smooth as it could have gone if we had met at my office. The restaurant is loud, the computer connection is bad, the programs don't work, we run into people we know that slows our private business at hand.
This is an area similar to lawyers and accountants. When we get together with this industry we go to them. I was surprised to have a medical professional come to my house but in hind site I should have gone to her office where she had all the tools to do what she does. Sales is a mobile profession but there are specific times to do specific steps at an office vs. a Starbucks. What do you think?
The home visit was a good idea I thought, but it became complicated for all of us and slower. The nurse needed some additional forms which put her on our computer. We had printing issues with the program and my kids were fussing which is always tough with business at hand. Taking the nurse out of her office for a home visit took her away from her office where she had everything to perform her work and expedite our meeting. Our meeting took longer and required me/my wife to do some extra work. Almost every time I meet someone away from my real estate office it does not go as smooth as it could have gone if we had met at my office. The restaurant is loud, the computer connection is bad, the programs don't work, we run into people we know that slows our private business at hand.
This is an area similar to lawyers and accountants. When we get together with this industry we go to them. I was surprised to have a medical professional come to my house but in hind site I should have gone to her office where she had all the tools to do what she does. Sales is a mobile profession but there are specific times to do specific steps at an office vs. a Starbucks. What do you think?
Expecting vs Inspecting on older home purchases
Putting a home under contract has some initial expense with earnest and option money. There is also a cost for your general (and possible subsequent specific) inspections after coming to agreement with your seller. Your expectations of the condition of that property will be a discussion point AFTER these general/specific inspections. At what point would you bail out to find another home? $500, $2000, $10,0000...
Here is the hypothetical; you are a buyer looking for a home to live in (not investor). And for this story we are NOT talking new/'to be built' but a downtown-central city house with some age on it. To make the offer you put down 1% earnest money and you have some additional money towards an "option period" (in Texas it is called 'termination option' section 23 of the paper work - a whole entry for this alone if you need more on 'termination option'). After securing the agreed to terms comes an inspection cost. Since your going to do the inspections on your older home purchase, at what price do you walk away over repairs or condition? There is not a "pass/fail" for inspections. This "pass/fail" is totally up to you the buyer. To be clear the general inspection is not the Appraisal with a capital "A"). The inspection results are relative to what you were expecting or not expecting . For the most part, the general inspector writes up a report relative to 'if the house was built today' highlighting code violations. Were you buying a turn key house which was marketed as a perfectly remodeled home? Did you expect some issues at the price you got it for? Does this house meet everything on your list plus more (an exceptional find for your goals)? Only you know the answer as the buyer and this is great information to share with your spouse/Realtor/self as part of the cost in making the offer.
If you decide to terminate the contract due to your initial inspections your 1% earnest money is likely refunded (reason for "the option money" I mentioned) and your only "out" about $100 to $500 depending on your terms for this "option money". The general inspection cost is about $300 to $400 with some variables we won't go into for now. Since a reasonable seller should be up for reasonable repairs on their dime, at what point is it worth walking away from your ideal home (which is why you put the offer down in the first place)?
Here is the hypothetical; you are a buyer looking for a home to live in (not investor). And for this story we are NOT talking new/'to be built' but a downtown-central city house with some age on it. To make the offer you put down 1% earnest money and you have some additional money towards an "option period" (in Texas it is called 'termination option' section 23 of the paper work - a whole entry for this alone if you need more on 'termination option'). After securing the agreed to terms comes an inspection cost. Since your going to do the inspections on your older home purchase, at what price do you walk away over repairs or condition? There is not a "pass/fail" for inspections. This "pass/fail" is totally up to you the buyer. To be clear the general inspection is not the Appraisal with a capital "A"). The inspection results are relative to what you were expecting or not expecting . For the most part, the general inspector writes up a report relative to 'if the house was built today' highlighting code violations. Were you buying a turn key house which was marketed as a perfectly remodeled home? Did you expect some issues at the price you got it for? Does this house meet everything on your list plus more (an exceptional find for your goals)? Only you know the answer as the buyer and this is great information to share with your spouse/Realtor/self as part of the cost in making the offer.
If you decide to terminate the contract due to your initial inspections your 1% earnest money is likely refunded (reason for "the option money" I mentioned) and your only "out" about $100 to $500 depending on your terms for this "option money". The general inspection cost is about $300 to $400 with some variables we won't go into for now. Since a reasonable seller should be up for reasonable repairs on their dime, at what point is it worth walking away from your ideal home (which is why you put the offer down in the first place)?
Tuesday, July 5, 2011
swim team and house selling
My 7 year old daughter showed up to her first ever swim team practice this summer. The city of Austin now requires all kids to show they can swim a length of the pool using free style and then another length using back stroke. The back stroke got her. It was a bummer for the both of us to leave the pool before the practice ever got started. She was "ousted" on her first day and it annoyed me and was a shock to her. I thought she would be enjoying her first day on her first swim team just like my memories of summer swim teams. Instead I was wondering what I did wrong to set her up for failure.
Selling a home can be a similar experience. The market is continuously changing. New homes enter the market with better pricing or better conditioning which under cut other homes on the market. The competitiveness of this market is not what many sellers experienced when they bought over 4 years ago. A seller can get a solid valuation on pricing but 45 days later it could need adjusting. The time on the market has increased over 20% so it seems like forever to get showings. Sellers need to be patient and be ready for a marathon not a quick closing/race. Buyers don't feel pressure to buy before someone takes a home they like. This translates into 2-3 days before making an offer AFTER seeing the property. Everything is slower. Even the response time in negotiating an offer is taking longer (and instead of closing a loan in less than 25 days, expect under 45 days). Then a seller sees other homes sell which they don't believe is as good of a comparable - "why them and not us". It is very difficult for a seller to objectively look at another competing house on the market. In my mind selling a home and my daughters swim team experience became connected.
We got together with my daughter and discussed a plan similar to a seller sitting down with a Realtor for a plan. She got a few private lessons just like a seller can hire a few private contractors for some "make ready issues". She made the swim team after those helpful lessons similar to a house making the 'top 3 list' of a potential buyer (the work pays off). My daughter adds a little practice to her strokes while enjoying a general swim just like a seller who cleans a little more than usual. Last Saturday was her first meet and like a showing she was ready. Her first meet did NOT end with a ribbon (win/place/show) but she will repeat the process and be ready for the next competition just like a seller should be ready for the next showing.
Selling a home can be a similar experience. The market is continuously changing. New homes enter the market with better pricing or better conditioning which under cut other homes on the market. The competitiveness of this market is not what many sellers experienced when they bought over 4 years ago. A seller can get a solid valuation on pricing but 45 days later it could need adjusting. The time on the market has increased over 20% so it seems like forever to get showings. Sellers need to be patient and be ready for a marathon not a quick closing/race. Buyers don't feel pressure to buy before someone takes a home they like. This translates into 2-3 days before making an offer AFTER seeing the property. Everything is slower. Even the response time in negotiating an offer is taking longer (and instead of closing a loan in less than 25 days, expect under 45 days). Then a seller sees other homes sell which they don't believe is as good of a comparable - "why them and not us". It is very difficult for a seller to objectively look at another competing house on the market. In my mind selling a home and my daughters swim team experience became connected.
We got together with my daughter and discussed a plan similar to a seller sitting down with a Realtor for a plan. She got a few private lessons just like a seller can hire a few private contractors for some "make ready issues". She made the swim team after those helpful lessons similar to a house making the 'top 3 list' of a potential buyer (the work pays off). My daughter adds a little practice to her strokes while enjoying a general swim just like a seller who cleans a little more than usual. Last Saturday was her first meet and like a showing she was ready. Her first meet did NOT end with a ribbon (win/place/show) but she will repeat the process and be ready for the next competition just like a seller should be ready for the next showing.
Friday, July 1, 2011
2nd Quarter importance
First time buyers really benefit from getting to know the market they are investing in. Lets look at like a hockey game with 3 quarters.
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1st Quarter
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Start with building your team; Realtor and Lender. Your Realtor will outline the steps in the process from beginning to end and you will share your goals with what your looking for. Your Lender will privately outline the specific mortgage process as it pertains to you (without the Realtor).
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2nd Quarter (most important)
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You like what you have heard from the Lender in terms of the money involved and you have begun to use that information to receive updates on available homes to view through your Realtor. Unlike ever before you will be at a heightened sense of attention to the mortgage markets and houses for sale. If you hear about a mortgage scenario that was not discussed - call the Lender. If you see a home for sale outside of what you discussed with your Realtor - call your Realtor. I don't think a buyer is really out to find "THE HOME" but rather remove all homes for sale and narrow down the list and this is similar to lending (remove what does not pertain to you specifically). First you get to know the Macro Market of real estate for the city your in (don't try to connect Detroit to Austin for example). Next get honed in on a specific neighborhood you really like in the Micro Market sense.
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3rd Quarter
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At this point you have completed a team of reliable professionals to provide you service. You have been backed for a loan (pre qualified or even pre approved) and become an expert in what to expect for house prices through looking inside homes of interest. All the terms you agreed to do under your paper work with the seller are followed and at the end your a home owner.
Have you received good "2nd Quarter" help from your team?
------------
1st Quarter
------------
Start with building your team; Realtor and Lender. Your Realtor will outline the steps in the process from beginning to end and you will share your goals with what your looking for. Your Lender will privately outline the specific mortgage process as it pertains to you (without the Realtor).
------------
2nd Quarter (most important)
------------
You like what you have heard from the Lender in terms of the money involved and you have begun to use that information to receive updates on available homes to view through your Realtor. Unlike ever before you will be at a heightened sense of attention to the mortgage markets and houses for sale. If you hear about a mortgage scenario that was not discussed - call the Lender. If you see a home for sale outside of what you discussed with your Realtor - call your Realtor. I don't think a buyer is really out to find "THE HOME" but rather remove all homes for sale and narrow down the list and this is similar to lending (remove what does not pertain to you specifically). First you get to know the Macro Market of real estate for the city your in (don't try to connect Detroit to Austin for example). Next get honed in on a specific neighborhood you really like in the Micro Market sense.
-----------
3rd Quarter
-----------
At this point you have completed a team of reliable professionals to provide you service. You have been backed for a loan (pre qualified or even pre approved) and become an expert in what to expect for house prices through looking inside homes of interest. All the terms you agreed to do under your paper work with the seller are followed and at the end your a home owner.
Have you received good "2nd Quarter" help from your team?
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