Let’s talk about loans …


O.K. maybe not loans, but I think everyone should have a short primer regarding how folks pay for a house.  It really doesn’t matter if it is a co-op, a condo, a town home or a single family home.  One of the basic rules of contract law includes the need for consideration. Consideration is just a fancy legal term for money. If you want to buy a house, you have to be able to produce the funds at settlement.

Now, if you happen to be loaded and can pay cash for the house, well you can either read through this for information, or you can check out another one of the articles I have written. For those of you that want to buy a home and don’t have cash on hand, this is for you.

For purposes of example, I will use a $500,000 purchase price. You and the seller have agreed on the price. Well now, wait a minute, let’s back up. You really should have an idea about all of this before you begin looking for a home.  The very first question you have to ask yourself after deciding you want to own a home of your own is how much can I pay for a home (keeping mindful that your comfort level should be dictated by what you can afford and not what you would like).

I am not a lender. I can only give you general advice in this area. Let’s make that specific advice. After reading this primer, talk to a bonafide lender! Then talk to another. Keep talking until you find one that you are comfortable with. They will provide the rock that your dreams of owning a home will be built upon. The lender will gather information about you and tell you what you can borrow.

The most basic loan is a conventional loan.  Lenders like this sort of loan because it requires that the borrower (you) contribute at least a 20% down payment.  In the example of a $500.000 purchase, you will be putting at least $100,000 down and the lender will provide the rest of the money. Each month you will make a payment that includes principal and interest.  If you do not have 20% down, you can receive a gift from parents or grandparents or anyone to make up the difference. You will need to provide the lender with proof that it is in fact a gift and not a loan. If you just don’t have the 20% down, you have other options.

The FHA guarantees loans. That just means that your lender will have insurance that some of the money you borrowed is guaranteed to be paid back. If you default, the insurance involved steps in. This guarantee allows lenders to loan money to people that don’t have the 20% down payment available. You still have to have at least 3.5% of the purchase price available, and there are limits on how much money you can borrow. The credit demands are a bit less restrictive. Oh, and you still go through the underwriting process. The FHA has rules about who can qualify and their criteria must be met. Every month you will have a payment that includes principal and interest and the mortgage insurance premium (yep, you have to pay the insurance. if you don’t like that, put 20% down).

Veterans have loan guarantees available to them as well. They can get a VA loan. This type of loan is from lenders but it is guaranteed by the Veteran’s Administration. Another feature of the VA loan is that you don’t have to have any money down. This sounds great, but the flip side is that you will have a higher mortgage and you will have  VA fee as well. The VA doesn’t lend the money. Just like the FHA, they guarantee a portion of the loan. That’s right, you pay the premium for the protection.

In some areas, the USDA guarantees loans. It is very similar to the VA in that, you don’t have to put any money down. Again, remember your loan amount will be higher and your payments will be higher as well. This is a great program if you are purchasing a home in an area where these loans are available.

Of course there are all sorts of hybrid loan types out there. There are terms that vary with lenders.

Things to know.  An ARM is an adjustable rate mortgage.  Simply put, the interest rate is fixed for a short term and then it can go up or down depending on the market. Usually, there is a cap on the interest rate (i.e. the highest amount the interest can be).  Lenders offer these loans at attractive rates. You should always consider what you can afford at the market rate today, that means the size mortgage you are comfortable paying at market rates.  Use the lower rate as a saving not a method to qualify for more home  (if variable rates are lower, borrow less and invest the saved money). NOTE: that is just my opinion. I really believe borrowing money, hoping that your income will go up when the rates go up is a fast track to foreclosure.

An interest only loan is another product some lenders offer. Not a bad deal for the lender. You move in. You pay interest on the loan until the interest only term runs out and then your payment shoots up like a rocket ship on rails. Oops. You can’t pay and the home goes into foreclosure. Interest only loans only have the interest of the lender at heart.

So it is not really confusing. There is a conventional loan and then there are other products available to those that do not have sufficient money saved to buy a home. Lots of people have used the FHA guaranteed loans and VA guaranteed loans and USDA supported loans. They are good loans. As a matter of fact, all loan products are good products if they are used by the right borrower.

Buying a home is a major step. I think it is wise to have some money set aside to invest in your purchase.  Of course, you may use a loan product that does not require that you put that money into the purchase of the home. Home ownership is not cheap. The money should be set aside for maintenance and upkeep. It will be your home after all.

If you have any questions, talk to your lender. If you are in the DC area and do not have a lender, I will provide you with a list of three names. You can call them all.

Once you have been pre-approved and are ready to begin the search, well, that”s my area of expertise. Once you are in my hands, I will review where you are with the lender, offer some advice about fine tuning the financing and then I will listen to you tell me a tale of your dreams and set out to assist you in making those dreams come true.

As always, I am only a phone call away…. 301-509-5111

The hardest call to make

phone call

The hardest call to make in real estate involves letting a client know that they did not get the house.  The other call is the one you see in advertisements. People on one end of the phone excitedly listening to their agent tell them “you got the house”, followed by shouts of joy and jubilation. Yeah, that is the easy call to make. The other end of the spectrum is the sorrow and frustration felt by clients that receive the call “the sellers decided to go with another offer”.

No one wants to be the bearer of bad news.  Some agents avoid making the call to the buyer’s agent because they don’t want to deal with questions. Some realtors avoid any confrontation and send a crisp email stating that their clients chose the other offer. Some even include platitudes about how it was a close call, but the sellers chose the other offer. Eventually, in multiple bid situations, one person will receive a call resulting in joy and everyone else will be left to share the bad news with their clients.

It is the hardest call to make. Cynics will share that the agent representing the people that were not chosen are only unhappy because they are missing a paycheck. Truth be told, it is only human nature to feel a bit let down when your clients are not chosen. It is not greedy to look forward to earning an income for doing your job. Sure, it is a bump in the road, but the difficulty in making the call has absolutely nothing to do with your income.

People have put their ability to buy a home in your hands. You have guided them through the process. You have used your negotiation skills and knowledge of how to write an attractive offer.  You have held their hand as they have put the best offer on the table. You have carried their dreams to the listing agent.

You receive the call (hopefully) or maybe the email (distastefully) or maybe you see the status change in the MLS without any notification (just cowardly and mean spirited) and you have to gather your wits about you and pick up the phone and make the call. Try as you might, the tone of your voice shares the bad news before the words can form in your mouth. You have to let them know.  Sure, you share that they put their best offer on the table. You encourage them. You tell them that “if it were meant to be, it would have happened”, “the right house for you is still out there” and you want to bang your head against the wall because you know how badly they feel.

We are not automatons. We do get emotionally invested. Our goal is to find the right home. Our goal is to guide them smoothly into the home they choose. At this point, we are way past the ciphering stage. At this point, we are way past what can be and what can not be afforded.  When you reach the point of writing an offer, you are at the end game stage.

This was the home they could afford. This was the home they wanted. This was the one.

The hardest call to make is letting them know that someone else just bought “their” house.

Tomorrow is another day. Tonight, you will feel their pain and dedicate yourself to work even harder to make sure they don’t receive that call from you again.

Frankly My Dear, WE do give a Damn !

Oh Rhett, you said we would always have Tara

                    I don’t suppose being a real estate agent carries the same frustrations shared by Rhett Butler in “Gone with the wind”.  It does have it’s moments.  Buying and selling real estate often includes challenges that threaten the serenity we all seek in our professional lives.  It happens.  There are agents that do leave you with the thought that maybe, just maybe, they “didn’t give a damn”. Some of you reading this have felt that way and you know exactly what I am talking about. To be fair, most agents care. The problem often is the result of inexperience.  Paralysis by analysis gives way to a deafening silence when clients expect answers.  The real or potential liability of “messing up” seems to cause agents that haven’t done many transactions to crawl into a “hypothetical cave” and wait for the storm to pass.  Clients are left wondering if letting their nephew, whom is just starting a career, handle their transaction was the wisest course to take.  Some are left to ponder if choosing their agent just because the agent works for a “name brand” company didn’t leave them with a well manicured, practiced script spouting novice. It may be hard to care about clients when you are struggling to understand the intricacies of your new profession or when you have not “done the dance” in a real ballroom.

         Frankly, my dear, we do give a damn.  It matters to us that every potential buyer is counseled at the beginning of their adventure and that they keep receiving advice and counsel throughout the process. Knowing exactly what to do and when to do it is important. Knowing why is comforting.  Our strength was not developed by attending more classes to generate fancy alphabetical designations on our business cards.  Our ability to take processes and language inherent in real estate and translate and explain them in layman’s terms is the cumulative result of handling hundreds of transactions as an agent and as a manager.  Experience is the birth place of understanding, actual skill development and knowledge.  I am not the first to share, knowledge is power.  Moving a transaction smoothly from start to finish takes power.

Experience has taught us valuable lessons.  It has also led us to make a significant change in our business model.  You see, there are practices that occur in real estate that have never settled well with us.  We have spent our entire career under the umbrella of the largest brokerages in the DC market.  There was a time when we actually bought into the theory that the branding offered by those firms was necessary to gain credibility with potential clients.  Experience has taught us otherwise.  The public is inundated with glitzy commercials that are long on statistic bending but short on reality.  We have spent time behind the curtain and would prefer to continue our practice in the light of day.

Our new home


         We have moved our practice.  You see, the big firms have chosen what they advertise as a “consumer friendly, one stop shopping environment”.  They have developed a model that offers agents, lending and settlement services under one roof.  The move caused the government to step in and require them to disclose their relationship to consumers.  Another part of the model uses “preferred partners”  in areas like home warranties, home inspections and insurance.  “Preferred partners” have been vetted and give the consumer one more choice when seeking assistance.

          Century 21 New Millennium is not a one stop shop.  We are free to offer recommendations for lenders, title companies, home warranties, home inspections and insurance.  In addition to the firms that have been vetted and established a relationship with Century 21, we can actually give our clients choices (if they ask) based on our experience with firms.  We receive no kick backs or other considerations for our recommendations.  The companies we recommend have performed in the past and have proven to be worthy or our trust.  Our clients are not charged a “transaction fee”.  We are  quite comfortable operating on the commission earned on sales and prefer to pay any additional fees out of our commission.  Working with us, you will get what you pay for… experience that makes a difference.  Give us a call or text us at 301-509-5111.

Home buying sealed with a KISS

K (eep) I (t) S (imple) S (weetheart)

          There are so many times that I can recall that a kiss was just what the doctor ordered.  A kiss for good luck, a kiss that bridges fantasy to reality, a kiss when wed, a New Year’s kiss and the infamous call when a ball is hit out of the park “kiss it goodbye” are kisses.  The right kiss can remove the stress of home buying.  K(eep) I(t) S(imple) S(weetheart).  Sure, the process can seem overwhelming.  Most people are not involved in the home buying process on a daily basis. I am. I know it may appear like a mystery to you, but I do this all of the time and I have to tell you, it is far less complicated for an experienced agent.  There is an orderly process to follow that will keep  you on track.

         To begin with, you don’t need any other people for your first step.  You have to move from the “I want to buy a house” status to the “I know I can buy a house” position. Now that sounds simple enough and actually it is. You want to be armed with information from the very beginning.  The most important pieces of information are your credit reports and  your FICO score. (Your FICO score stands for the Fair Issac Corp., which is the company that uses proprietary algorithms to reduce your financial history to three digit number that ranges between 450 and 850. The higher the number, the better your history and the better your chances are at getting a loan at favorable terms. If you number is too low, you won’t be able to qualify for a loan without an extraordinary amount of money down.) There are three major credit reporting agencies. They are pretty much the same, but not always exactly the same. I would avoid the free credit report sites. They have a lot of small print and tend to end up costing you an ongoing fee. Your best bet is to go to www.annualcreditreport.com. Follow the instructions and gather all three of your reports. You will notice they do not include your FICO score. You can purchase your FICO score online at www.myfico.com. Now, before you ask “Why do I need this if the lender will get it?”, let me just share that it is better to know how you look going in than it is to be blindsided sitting in a lenders office. You should be in control and getting the facts will give you that control.

         Once you have you credit reports and FICO score in hand, you are ready for the next step. Before you go looking on line, before you start wandering into open houses, before you even begin the home search, you have to KNOW how much home you can comfortably afford. You are now ready to sit down with a lender. My advice is to get in touch with an experienced, local mortgage lender. It is best to focus on a loan officer that is well know in the community. As alluring as the on site lenders may appear, they are often located quite some distance away and that fact may hinder you as the time to close the loan draws near. The lenders job will to be to provide you with a dollar amount for the home you can afford. One word of caution, make sure that the lender is working with today’s interest rate and a clear picture of what your monthly payment will be throughout the length of your loan.  With rare exception, you are a fool if you agree to a loan that has low payments today and the caveat that the payments will increase in the future. MAKE SURE YOUR LOAN QUALIFICATION IS BASED ON TODAY’S INCOME AND TODAY’S INTEREST RATES. The goal of this meeting is to get a informal commitment from the lender. The lender should be willing to provide you with a “pre-qualification” letter that will state that the lender has reviewed your credit, has verified you income and the cash you have available for a down payment. The letter should state that the only information needed for the loan is a contract on a home and a satisfactory appraisal of that home.

         It would be in your best interest not to get caught up in the slight variations in interest rates and fees.  The lenders job is to make sure your loan is funded within the time constraints outlined in the contract. The lender will have to provide you with a good faith estimate. You can use the good faith estimate to compare what is offered against other lenders. If you do not have a lender, check with your bank or credit union for a recommendation. If you have an accountant, they may know of a lender. You can also ask a real estate professional for the name of a good mortgage broker. (If the agent refers you to a lender that is tied to their broker BEWARE. A good mortgage lender does not have to affiliate with any real estate brokerage. Once an affiliation exists, the possibility (real or imagined) for violations of RESPA come into play.)

        I know you hear the NAR commercials suggesting that you need a Realtor. In Maryland, almost 10   Your next step is to select ONE full-time experienced real estate agent.0% of the practicing agents are Realtors. (You see, in Maryland, every agent has to work for a broker. If a broker wants to be a member of the Maryland Association of Realtors, something they have to do to be a member of the NAR, they must agree that all agents working for them will be members as well…ergo…almost 100% of the agents working in Maryland are Realtors).   Now, how do you find a good agent (hint: if you have read this far, you are already pretty close to a dog gone good agent, but I digress)? Some would say, ask a friend, ask a co-worker, ask a family member…ask somebody.  I would suggest that you can do your homework. Go on-line and find an agent that shares more than listings. Find an agent that has experience in the market and the area. Talk to the agent. Discern their style. Beyond knowledge, you will have to be comfortable and believe that the agent knows what they are doing.  I am not the only one that believes experience is a difference. Dave Stevens, the former head of the FHA agrees with me. Why full-time? Representing you is their job and you deserve the full-time attention of the agent. There is no reason you should receive part-time representation from a part-time agent that will be earning full time pay!

          Of course, you might think that you can go it alone. Every home worth considering is on-line. The listing agent can unlock the door for you. Why go through the hassle of working with one agent? Well, you are right. A monkey can find homes for sale randomly plunking a keyboard.  Beyond that, you enter murky waters when you choose to swim alone. Finding the right home is but the tip of the iceberg.  Doing it on your own will always leave that nagging doubt “would a real estate agent have found a better home?”  Once the home is discovered, do you really want to go on line and print out a contract and sign it? In Maryland there are over 50 pages in a real estate contract to purchase. The body of the document is 11 pages of terms and conditions. In addition to that there are local addendum’s, jurisdictional addendum’s, disclosures about the home, about lead paint, etc., and then you have to add various contingencies for inspections, appraisals and dozens of other potential requirements. You are done yet. If the home is governed by a home owner’s association, you will need to request and review their documentation. There is a sea of paperwork that flows between the front door of your dream and the settlement table where you will close the transaction.  The real estate agent is the captain of your ship of dreams and you better be sure he is sea worthy and able to get you into a safe harbor and closed on time.

         There is a lot to consider when you first begin to believe, “I want to buy a home”.  Rather than be intimidated by the challenge, keep it simple sweetheart, follow the easy steps. You don’t have to be a wall flower, the band is playing.  Is it your time to dance?

         I’d love to go over any of this with you. If you are seeking a captain, I’d welcome the opportunity to take the helm! Contact me. 

4.5% Listing Feedback…Still think you need to pay 5 or 6%?

Sure, there will always be naysayers.  There will always be those that refuse to accept that you could possibly receive a full service listing of your home for only 4.5%.

This is an unedited note from one of our recent clients. (Oh, the house sold in about two weeks!)

Hi John and Lourdes,

Sorry not to have written sooner.  It is just today that we’ve gotten our internet service in our house in Cambridge.

We are writing to thank you again and to express our appreciation for your help with the recent sale of our house in Derwood.  We’re very happy with the results.

You helped us work out the right price and get a solid contract in less than 3 weeks.  From start to finish, the whole process was uncomplicated and your advice helped us make good choices.  It seems to us that one special way you made our sale happen is by how well you leveraged the internet.

Recently, when searching for our new home in Cambridge, Barbara and I learned how important it is to have good internet presence.  We looked long and hard on-line and had a pretty good idea of what we were interested in before we ever contacted an agent for help.  That’s a big reason why, when it came time to get an agency’s help with listing and selling our Derwood house, we felt you were the right team to help us.   We think your detailed on-line listings – with great photos – and the articles and blogs you wrote got us sold quickly.  And, that this had a lot to do with our receiving two offers – with one being from out of state.

We’re very fortunate to have had such good guidance.

Many, many thanks,

Scott and Barbara Yann

If you are preparing to sell your home, you just might want to contact us.  

Washington Post…”average commission climbing”..We say 5% is enough!

You may get it … obviously, they don’t get it

          The “REAL ESTATE” section of the June,11, 2011 Washington Post features an article by Dina ElBoghdady titled “… And the broker takes a slice.  The story is sub-titled ” As market has soured, the average commission has been climbing.”  You can feast your eyes on the on-line version by clicking Post Article.

          If you visit the Post website to read the article, be sure to note the paid ad in the upper right hand corner.  Ms. ElBoghdaddy seems to have a certain slant to the article (through words, inferences and people she has chosen to quote).

If you have read this far, let me state… WE THINK LISTING RATES ARE TOO HIGH IN THE DC MARKET AND WE LIST HOMES FOR NO MORE THAN 5%.  You can now return to the gibberish shared in the article.

          The article does offer some insight into the mindset of sellers that wish to go it on their own.  The commission paid to the agents involved does come out of the sellers proceeds at closing.  Of course, the sellers proceeds come from the buyer at closing.  Who is actually paying the agents may be literally the seller but in reality it is the buyer providing the funds. If you focus on who is actually paying,  the seller is overlooking the more important question…”How much will I net from the sale of my home?”  Most sellers want and should receive full service from their agent. The price they pay should not be based on yesterday’s marketing, nor should it be based on the unwritten, but widely practiced 5.5%.

          The article indicates that the average commission being charged in the DC area has increased from a low of 5.02 percent in 2005 to 5.40 percent in 2010.  Those figures indicate that a lot of sellers are savoring the sizzle and never tasting the steak.  Those figures indicate that sellers are willing to pay more for less. In plain words, it may smell good on the grill but it tastes like shoe leather on your plate.

         Well, not so fast grasshopper.  Ms. ElBoghdady has reached out to some experts (?) to explain and justify this increase in commission rate.  The illustrious Steve Murray, president of Real Trends shared that “During the boom, competition among agents drove commission rates down. Now, agents are putting more time and money into marketing these homes, and they’re not as willing to compete with each other by lowering commissions.”  Hmmm..I guess it should be pointed out that Real Trends is a firm that makes its living off Real Estate agents.  They charge a fee to brokers so agents will have access to trade information and tips on how to make more money.  It would seem that Real Trends and Mr. Murray have a vested interest in agents earning more money.  I should point out that some agents that pay for his service, include the cost of his service in their annual budgeting  which then becomes a factor in the commission rate they will charge.

         The next expert (?) Ms. ElBoghdady quoted is none other than the president and chief operating officer of Long&Foster, the Washington area’s largest real estate brokerage. Jeff Detwiler ( formerly a big mortgage company executive…oops…does that resume say Countrywide????  Now their history in the industry just screams …expletives deleted).  Well, Mr. Detwiler shared “The lowest commission rates were in a marketplace where buyers and sellers were coming together on their own and agent’s job was to line up orders and show products.”

          ARE YOU KIDDING ME????  Note to Detwiler…. While you were rolling along in the Mozilo-mobile, Long and Foster agents were doing a damn site more than taking orders.  Of course, you may have missed that while you were dodging the bullets fired at Countrywide...see this story    I am not just sharing hearsay, I worked at Long & Foster and I am familiar with hundreds of agents and managers there.  Comments like this further erode your relationship with agents on the street.  Just shut up. Oh, and please check the history, Long and Foster was the firm that began charging 7% for listings until market pressure forced them to drop the policy. This occurred after the company claimed the higher fees were a success.

          The article progresses with Ms. Boghdady’s assertion that “many firms offer deeply discounted but limited services to such sellers.  She points to the Redfin model of rebating a portion of the commission back to customers and the Save6 model which offers a flat fee service.  Discount is an interesting adjective. It implies that there is a set rate which is discounted.  Whatever a broker is paid is negotiable. There are no discounts.

          The next area covered in the article covers the perils of “for sale by owner”.  Without attributing the statement to anyone, Ms. Boghdady states “sellers who go it alone…end up leaning heavily on the buyer’s agent.”  The buyer’s agent represents the buyer and can not give the seller any advice. It is against Maryland law. The buyer’s agent can not represent the seller. For sale by owner folks are on their own.  At this point she quotes Joan Caton Cromwell from McEnearney Associates “You end up doing the work that the seller should be paying their agent to do. Also, the sellers are emotionally involved with the property and they all think their house is the best house on the block.”  Smoke and mirrors folks. Of course many of the sellers are attached to their homes. The buyers agent can not advise them about the sales price. The buyers agent can only present an offer. It seems that some agents need to brush up on “whom the agent represents.”

         The next dance involves the amount of commission offered to the buyers agent.  Larry Lesson shares that “There’s no motivation for a Realtor to show a house if the seller is only offering 1 or 1.5 percent commission”.  I admire Mr. Lesson for professing what happens behind the curtain. I can also share that any agent that eliminates homes based on the commission being offered is operating outside the lines.  Jonathon Hill had the courage to share that agents “shouldn’t pick and choose based on what the agent wants.”  Buyers are supposed to have the option of choosing a home from homes that meet THEIR criteria.  Agents that eliminate homes because of the amount of commission offered are not interested in their buyer clients best interest. They are only interested in making as much money as possible. If you look at the bottom of the shoe labeled integrity, you can scrape these agents off.

         One other point was covered. What happens when a non-represented buyer shows up. Should the listing agent keep all the commission?  Some agents make a living “double siding” transactions.  At this point in my career, I don’t think it is a good way to do business. It is never an issue with our 5% listing service. If someone shows up without an agent, we will recommend an agent for them. We want no part of the buyer’s side of the commission. We want the 2.5% we share to be paid to an agent that represents the buyer. We firmly believe that both sides in the transaction should have their own representation.

        It is a very interesting article. It is not completely accurate, but one must consider the sources referenced.  We do offer a complete, full service listing service for 5%. If you wonder how, read this post.  If you are interested and wish to contact us, call us at Century 21 New Millennium (301)509-5111 or (202)656-5710  or use this form and we will be in touch


Selling your home? Why pay more ?

Here’s the deal. Brokers used to justify their 6% or 7% listing fee because there was a “cost” to marketing your home. They had pretty color glossary hand outs created that showed you the enormous cost of letting buyers know about your home.

Sure, they would list things like the Washington Post, Homes Magazine, the local Gazette, New Homes Guide and other real estate publications. They would have the cost of a virtual tour, color brochures and a sign out front listed as well.

They might have included the costs of broker’s open houses and general public open houses.

I have no doubt that back in the day; those were the only methods available to promote your home.


This is a new day.  The only thing that the Washington Post, Home Magazine, the local Gazette, New Homes Guide and other real estate publications promote is the agent listing your home.  They are asking you to pay for promoting their interests.

What about the virtual tour, the color brochures and that sign in the front yard?  Can I say “You tube”?  Can I share that creating a virtual tour is NOT brain surgery?  Those brochures are eye candy.  The people that pick them up are in the house. All of the pictures should be on line. Oh, and that sign out front with the listing agent’s picture and phone number; it shows the home is for sale but it promotes the listing agent.  They are asking you to foot the bill for things that either cost nothing or promote the agent.

Think about it. Should you pay for the cold cuts and soda served to agents that attend broker’s opens?  They are asking you to subsidize lunch for friends.

Almost all buyers find new homes on the internet.  Any agent worth his or her salt has a website and adding your listing does not cost a penny.  The majority of listings are found via the Multiple Listing Service.  Buyer’s agents review them daily. The use of the internet in marketing your home has slashed the cost agents used to pay.



We  only charge  4.5%

(You can take the rest to the bank!)


Momma said there’ll be daze like this

“I’m not sure you understood me”

When you think back, momma had a lot of advice.  Sadly, a lot of it went in one ear and out the other.  Advice shared was not heeded and lessons learned the hard way followed. Momma said this and momma said that.  Sometimes, we heard and other times we thought we heard what was being shared.  There were many times when words were spoken and we assumed we heard exactly what was being said.  Not so fast grasshopper. Momma never said “there’ll be days like this”.

Momma said “there’ll be DAZE like this”.  Of course it was easy to misunderstand.  You had just suffered some calamity and were at a loss to understand how it happened.  At that moment, your world was upside down and in your heart you were sure things would never get better.  Momma would hug you and whisper “there’ll be daze like this”, and you would think she was saying bad days happen. Not so.  Momma was sharing that life is confusing and often when bad things happen, we did not have a clear picture of reality.  Momma said “there’ll be daze like this”.

Momma could have been referring to the process of buying a house. Even the most well informed buyer is faced with a dearth of information that at times seems contradictory.  Where do you begin?  How do you sort out all the homes that are on the market?  What is the difference in things that need to be disclosed?  What does all the paperwork I am asked to sign really mean?  It seems like every time you take two little steps forward, confusion erupts and you take three steps back.  It is so confusing you end up in a daze.  Momma said “there’ll be daze like this”.

More times than I can remember, if I asked for more information, I was directed “ask your father”. Momma always had the best advice on matters of the heart.  When it came to dealing with the world and finances and things of that nature, she always pointed us towards our dad.  If dad did not have the answer, he would go get the answer from an expert in the field. If you are confused about the steps to take and the pitfalls to avoid in the home buying process, you are not alone.

Remember, Momma said “there’ll be daze like this”.  In this situation, she would also share, “Real estate questions? Let’s ask an expert! Call that John MacArthur fellow. His number is 301-509-5111.”

How do I pick a Realtor?

How do I pick a Realtor? I suppose I hear that question more than any other.  I read it on ask.com. I read it on yahoo?  The question shows up on zillow and trulia on a regular basis.  I have read the answers offered by “experts”.  Yes, I did say answers.  Depending on whom is answering, the answers range from ask a friend or family member or pick a few and set up an interview process.

Let’s say you opt for asking a friend.  Which friend will you ask?  Maybe you will ask a family member for advice? Your comfort level with the answer will be subconsciously linked to your comfort level with the person you ask and your perception of their ability to give you a good answer. It is a simple question, how do I pick a Realtor?

And what if you do pick a few and set up an interview process, will you really feel confidant that the few you picked were the cream of the crop available?  Isn’t it possible that the first time something goes wrong, you will begin to doubt. It is a simple question, how do I pick a Realtor?

Before you head down the wrong road and put yourself in the hands of the wrong person, let’s go over some basics. You are starting the process of making a large financial transaction.  It really doesn’t matter if this is your first  home purchase or the last time you plan on selling a home.  Right now, it is the most important transaction of your life. You should be very sure that the agent you choose is going to get the job done for you.

The fact that you are here and reading this indicates that we both are internet savvy.  I wrote this and posted it on the internet.  You did a search or clicked a link and here you are.  Small point, but very important to note, your Realtor has to be internet savvy.  It is not enough to have a fancy website.  Fancy websites are not created by Realtors. They pay fancy website people good money to create them.  A good Realtor will have great deal more substance than style. It is better to deal with ugly facts than rely on pretty promises.

A good Realtor is going to offer more than texting and tweeting and emailed listings.  Fifth graders have accomplished texting and tweeting.  You have to be smarter than a fifth grader to be a good Realtor.  Anyone that has a license and access to an idx feed can send you listings.  All listings come from the same source. It is not top secret or magic anymore.  You can visit any major broker, homesdatabase.com, and scads of sites that ask you to sign up to see listings ( the small print gives them the right to sell your name to an agent. The agent does not have to be qualified, the agent only needs to have a valid credit card and willingness to pay for leads).  A good Realtor doesn’t buy you, he earns your trust.

New agents have passed the necessary test to get their license.  The industry does not like to reveal the fact that the license requirements for your barber ( you know, the one that charges $20 to cut your hair) are more extensive than the requirements to earn a real estate license.  There is no formal apprenticeship program.  You get your license and brokers greet you with a smile, a handful of gimme and a mouth full of much obliged. Odds are in your favor that someone that has been licensed for over 5 years might be a better bet.  A good Realtor doesn’t practice on you, he has been involved in the practice of real estate.

I have pondered the question for quite some time.  I am a good Realtor.  Exactly what quality do I offer that gives me the confidence to make that statement?  I asked past clients.  I asked people that I worked with and our effort was not successful.  I wanted to know.  The answer was a simple word.  Oh, I expected prompt, honest, hard working, fair, good listener, responsive, tech savvy and lots of other terms that have been bandied about.  I was surprised at the most frequent answer.  I thought about it. It is the one thing people like you are seeking when trying to choose a Realtor.

Security.  One word that speaks volumes. You want to be secure in the fact that your Realtor knows what the hell he is doing.  You want to be secure in the fact  that your Realtor is competent enough to not only accomplish your goal but will do so in a fashion where your best interests are protected. You don’t want to worry. You want to know everything will be all right.  You just want Security.  It takes the experience of 100’s of transactions to develop a solid sense of how things are going and to be able to spot a fly in the ointment.  It takes experience to offer that security.

How do I pick a Realtor?  I might suggest you start right here.  I have the experience to offer you the security you are seeking.  My name is John MacArthur.  I can be reached via this LINK Oh, you can text me at 301-509-5111 if you choose. A good Realtor is approachable. I encourage you to experience the difference.

The effective way to purchase a home in 2012


This is not the way that people seek the truth today.

This is an example of where consumers seek the truth today.

For all you marketing geniuses out there, the landscape has changed. Big firms and yesterdays marketing pro’s have always tried to stay ahead of the curve. They also did everything possible to picture their product or their style as being the best in the market. The time has come for them to get in the fast lane or risk being kicked to the information super highway curb. The consumer of 2012 and beyond is not some hapless spender hoping that the wise, well imaged owl will rescue them from their own ineptitude and deliver what they need.

The consumer today does more research and is more prepared to make a decision than any other time. Today’s consumer is not visiting open houses for kicks. Today’s consumer knows more about the houses that are available than most real estate agents. They are armed with information. Some is accurate and some is not. Today’s consumer just wants the truth…the truth at a fair price!!!

Buying a home in 2012 is like peeling an onion.

The disconnect between the desire to buy and actually doing so in a comfortable fashion is filled with layer upon layer of processes. Each time a buyer peels back one layer, there is another waiting and it seems each one is so convoluted that the buyer finds his or her eyes welling up with tears. The industry’s zeal to minimize all liability has created, in some cases, an atmosphere of tempered information and in others, responses that resemble “my lips are sealed”. Consumers want answers. They want answers to their questions. They do not want sanitized sales pitches. They do now want to hear that they must follow blindly along because the agent is “in the top 5% of real estate agents in the USA”. They want to be represented by the top agent in their transaction – period.

They want agents to STOP selling and start representing.

Basic overview

Keep it simple. Let’s start with the premise that most buyers DO NOT have cash to buy a home. Sure, some do but most don’t. They are going to have to finance the purchase. Lenders just have to accept that a lot of people don’t find them very trustworthy and they find the whole borrowing process mystifying. Lenders you did it to yourself. I have never met anyone buying a home that had the opportunity to pull in a little TARP money if they fell short on cash. You did, most of us don’t have a clue what it was or why you got it. The general feeling is that you made a lot of money off bad loans and discovered that you had no money left after lining your own pockets.

Deal with it, there is a trust issue.

Most buyers really don’t care how tough the new GFE is or how the requirements make it more difficult on you. Most buyers did not understand what the hell was going on with the old GFE, so the fact that you find this one less clear does not matter. Muddy water in a jar and muddy water in a bowl is still muddy water. Buyers want to know what information you need, how much cash they have to have and what they will be paying each month. They want to know how much house they can afford comfortably. (Here is a little secret, you can still blow smoke up their rear end and convince them they can afford more…they don’t understand….but when things get tight and they walk…you really have to stop blaming them.) Here is a fact, there are a hell of lot more people facing foreclosure than there are lenders that made the loans. I don’t have the numbers, but I sure can read the papers and I know there are not a million different lenders out there. (Remember Jonestown? One crazy preacher and hundreds dead. Seems like a fair analogy)

IMPORTANT EDITORIAL COMMENT: During the recent real estate fiasco, appraisers got paid, lenders got paid, agents got paid, ancillary service providers got paid. Apparently, by the time the Feds are done even the investors will get paid. The American Taxpayer is footing the bill. Everyone had their greedy finger in the pie. Advisors (read agents and lenders) were the ones that convinced buyers they could afford what they were purchasing.

OK. so can you simplify the process? Can you just explain how things will pan out in the real world on a month to month basis? May be you could actually do that as an added value service.

Folks pay a lot of money for this logo. It would be prudent to discover if they live up to the creed.

Realtors, most buyers don’t need you to find them a home. You can offer to send listings, but you better have a cracker jack website for them. At least tell the truth, they don’t have to use your site. There are 100’s of sites that have the local listings. You do not have a secret stash of homes for sale. (If you claim that you do and you have listings that you do not list in the MLS, you are violating the law. Why would anyone want to use an agent that can not even obey the law?).

If I could share anything that I have culled from conversations with buyers today… lose the fake smile, fake laugh and patronizing attitude. Do not load buyers in your car. Let your buyers tell you what they want to see. If you think they might have missed something, tell them and let them decide if they missed it or not. You can follow them, unlock the doors and stand back. You should be using your eyes and ears. Enough with the guided tour remarks, let your clients focus on what they see. They really don’t need you to point out that a counter is granite or that the 6 foot wide, double door in the basement is a walk out. Your endless prattle is only annoying background noise. Let them think!

The perception out there is that agents seem to have control issues.

Well, you know what, most agents do have that problem. It is no longer acceptable. Lose it or send resumes to CarMax or Best Buy. The buyers of 2012 want to tap into your knowledge and not your opinions. They want you to be the expert on determining value and negotiating and looking out for them. They want your focus to be on helping them own a home. They are really turned off if you seem to be more concerned about your paycheck than their welfare. They really do have a right to know that you have done this before. Experience is very important. 

Oh, and one last thing…lipstick on a pig? It is still a pig.

You can hide behind your fancy terms of puffery, etc. It is a damn lie, that is obvious to buyers, when you use remarks in your listing, that a home just needs some TLC and actually are  full of trash, missing appliances and smell like a public cat urinal. You are not doing the seller any favor. You are just wasting the buyers time. If the house is a dump, tell it like it is. Oh, and those pictures you post on line that were taken before the stove was removed, they need to go the way of the high school photo you still have slapped on your business card. (The younger generation really wonders if you think they will be struck blind from the time they see that out of date photo on your web page and the 10-15 years older version that is also 2o lbs heavier that walks through their door. If you can’t see the difference between the image you share on line and person you see in the mirror, how can you be expected to be aware of all the intricacies involved with represent the buyer?” They want to buy a house and your glamour shot will not enhance their chances …. use the money on education or better yet one of those self help courses that teaches folks to accept themselves.

Final Word

Pinocchio was really cute in the movie. Today’s consumers don’t want cute, they want the truth. Opps, they also want just a little respect. Little respect…no…they want total respect. Total respect means listening to them, letting them take the lead and protecting them as they move through the process.

When are you people going to get it?

If you are currently in the market for a new home, let us take you through the process…step by step. We use all of the gadgets and still find a way to get beyond the bells and whistles and offer our clients help.

We are John MacArthur and Lourdes Tudela and our phone number is 301-509-5111.

 New Years Eve 2011

Cheesy but up to day picture of us