Excellence Comes Standard!

          Real estate is a strange profession.  Ideally, real estate agents are supposed to focus on helping consumers in a buying or selling transaction. There is money to be made, no doubt.  When the market was soaring, everybody wanted to get into real estate.  Why not?  It certainly was easy to get in. In this area, you had to take a 60 hour course and pass a couple of exams and voila…you too were a real estate agent.

         Actually, it takes less training and time to be a real estate agent than it does to become the barber or hair stylist that cuts your hair.  Of course a lousy hair cut is visible to everyone and bad barbers or bad hair stylists are soon out of work.  Real estate agents have the benefit of working in the shadows.  Most of the people they serve don’t know what should be done and evaluate the agent based on personal bench marks.  If no one is the wiser, bad agents just keep on turning up with the regularity of a bad penny.  Don’t get me wrong, bad agents aren’t for the most part bad people.  They just seem to be less experienced.  Eventually, they may figure it out.

          How can you tell the difference between the good and the bad?  Lots of articles are written about reviewing a few agents before selecting one.  Now that sounds like a good plan, but what criteria should you be considering?  No offense to your nephew or your co-workers cousin.  They might be wonderful people, but a family relationship should not be your only benchmark.  Your first question should be “Have you done this before?” or ” How many transactions have you been experienced?”  It is not always wise to have your experience be the training ground for someone.  Experience does make a difference.  You will fare much better when situations arise if your agent is cool, calm and collected because they have “been there” and “done that”.  Your results will be more favorable when you are represented by someone that is focused on a plan rather than someone that is hoping they guessed right.  An experienced agent will put you in the strongest position during negotiations.  Lessons learned through hundreds of transactions create a sense of confidence that should not be over looked. ( Back in the wild wild west, the experienced gunfighters knew – never draw when facing the sun.)

         We certainly hope that if you are in the market to buy or sell, you take the time to at least contact us.  We have done this before. You have a choice in representation. Choose wisely.  Give us a call or text us at 301-509-5111.

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

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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.

 THAT WAS THEN AND THIS IS NOW!

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 GET IT.  LISTING A HOUSE SHOULD COST LESS.

INTERESTED IN A FULL SERVICE, COMPLETE INTERNET LISTING

We  only charge  4.5%

(You can take the rest to the bank!)

CONTACT  ME NOW

Selling? Consider a Land Contract

Selling your home? Depending on your situation, you might want to consider a land contract. In the DC area, home sellers are still facing a depressed housing market. Regardless of the paper tiger pronouncements from the National Association of Realtors, people who live here know that the market is stagnant.

Sellers that place their home on the market face competition with bank owned properties that are for sale at reduced prices, homes put on the market by sellers seeking to complete a short sale (often marketed at a fantasy price), homes being sold by corporations and other sellers that are not upside down and just want to sell. The average days on market usually represents all of the homes for sale.

Faced with this situation, sellers need to be aware of every opportunity available so they can decide which way of selling the home will work to their benefit. The biggest factor behind the increasing days on the market is the fact that over 25% of the people who attempt to get a loan are turned down. The necessary credit score to get a mortgage has risen significantly. Despite information shared in the media, lenders have “overlays” that require a greater score and a squeaky clean credit history. It doesn’t matter if rates are low if those that wish to buy your home can not get a loan.

Another factor sellers face has to do with the appraised value of their home. Lenders will only approve mortgages for a percentage of the appraised value. If the appraised value is less than the contract price, there are a few options and none of them favor the seller. The buyer can opt to make up the difference in cash (in essence use their personal funds to pay more money than the lender has told them the home is worth), the seller can lower the price and if all that fails the contract can be declared void (legal term meaning everyone will act as if it never happened).

Consider a land contract. There are pros and cons to a land contract.  A land contract is a private, contractual agreement between a buyer and a seller. Due to the nature of the contract, sellers do not have to comply with the property-condition requirements that are usually part of a sale funded by a mortgage.  The seller decides upon whom to sell the property to in the agreement.  This creates an opening for people who can not get a loan through traditional methods.  These buyers can not shop around for loans seeking low-interest rates so the seller can demand a higher interest rate and probably a higher price than if the home were being financed by a third-party.  The title does not transfer until the loan is paid in full. This means that the seller retains legal ownership with the right to evict the buyers if they default on the payment plan.  If the buyer defaults, the seller keeps all the money paid.

There are other factors that must be considered. Land contracts do not provide a lump sum payment at the time of the contract.  The seller becomes the lender.  If you need the cash from the sale of your home to buy another property, this may not be the best way to proceed. If the full proceeds are not needed right away or if the market is so depressed there is no other way to move the property, a land contract may be the way to go.  The other point that must be considered is if the buyer stops paying, the seller must evict them and re-market the property.

Ideal candidates for this process include but are not limited to people who inherit property and want to sell it in a depressed market,  people who do not need a lump sum payment right now and people facing a financial crisis. You do not have to pay off your home to sell it via a land contract.  Land contracts and contracts for deed provide a  way for people to sell their homes and owner-finance them and not pay off the existing mortgage. A land contract establishes a purchase price and mortgage terms that the buyer pays to the current owner. If the seller currently has a mortgage lien, the seller continues to pay his monthly mortgage payment to the mortgage company.

Everyone’s situation is different.  If you would like more information about land contracts, CONTACT ME. My name is John MacArthur. I encourage you to experience the difference.

How Do I Price My Home for Sale?

How do I price my home for sale? The answer to that question takes a little more thought and creativity than it used to take in days gone by.  In the Montgomery County and Washington, DC markets, we watched prices explode and almost double over a period of a few years ending in the late to mid-2000’s.  Then, we watched in horror as home prices peaked and exploded, falling in a rush to levels equal to or below the pre-rise numbers.  It has been like reliving the explosion of the space shuttle… lofty dreams of uncharted areas being reached turning to fractured hopes and yesterdays ashes coating a new reality.

Practices used in the past have no relevance today.  The rise and subsequent crash and burn have occurred while other new paradigms were taking place.  The manner in which homes are sold has been completely revamped.  It used to be a simple matter of meeting with the most well known real estate broker in the area, evaluating the neighborhood sales, pricing your home, putting a sign out front, an ad in the Washington Post and waiting for offers.

Those days are gone.  The internet has changed everything.  Buyers begin looking for homes long before they know what they can afford.  Buyers begin looking for homes long before they choose a real estate agent.  Buyers sign in and begin searching for homes without any regard for the name of the broker.  Information is free, available and overwhelming.

How do I price my home for sale? Initially, the answer will include some of the old methods.  The clearest indication of market value is taking a look at market results.  Understanding market results and making sure that the actual market results are the ones you are using is the challenge.  The days of all homes being pretty much the same are long gone. While it is true that you need to narrow your market to somewhere in neighborhood of a two mile radius of your home, you need to cull the chafe from the grain within those parameters. Before the listing agreement is signed, you have to have an understanding of what the appraiser working for the lender being used by your potential buyer will be looking at when he appraises your home. This is a prime factor to be used in pricing your home for sale.  The amount of money you want to sell the home for has little relevance if no one can get a mortgage to pay you. The hidden secret is that the lending institution being used by your potential buyer will have the last say in the sale of the home.

How do I price my home for sale?  Bring in a real estate agent. Focus on one who knows your market.  Focus on one who has a good understanding of the internet who might buy your home.  Pricing the home for sale and the subsequent marketing of the home will be heavily influenced by information available on-line and the agent’s ability to use the internet to your advantage.

How do I price my home for sale? A broad overview indicates that you evaluate the actual market, come up with a reasonable range, visit homes for sale within your reasonable range and price the home accordingly.  It may appear biased for me to advise you to use a real estate agent. It really isn’t biased, it is an opinion based on years of experience and seeing the results of those that chose to go it alone.

If you have any other suggestions, share them with me. If you would like to talk about this or any other article, call me at 301-509-5111.

For more information, just send me your information