Believe It Or Not, Your Realtor May Have Some Good Advice!

It seems like in today's real estate market, everyone is an expert except the actual agent they are working with. Not literally, but that is how many buyers and sellers act towards the agent they have hired. With dozens of real estate shows like "House Hunters," "Property Virgins," or "Bought & Sold" (which is now in heavy rotation on HGTV, and stars your friendly neighborhood blogger...ME!), every one seems to know better. But one thing that the general public has to understand is: a reality show is not going to give you the market analysis that a Realtor will. We are hired for a reason, and we have the best of intentions for getting your home bought & sold. All we ask is that our suggestions are taken into account and not brushed aside. On a larger scale, you wouldn't tell a brain surgeon how to operate, would you? You would just trust that he or she had your best intentions in mind. Similarly, a real estate agent is hired for his or her expertise in the field. That is why our advise can go a long way if we are given the chance. Our resume is a perfect way to prove that we are right for the job. For me personally, 17 transactions (and counting) in two years ain't too shabby.

When I go into a listing appointment, I have done extensive research beforehand to come up with the best possible price to get the property sold. In this unfortunate housing market, the best price is not always the most desirable one to the seller. I can completely understand that. When I was shopping around for a condo about four years ago, the exact same condos were on the market for 250k+, and now they are selling for high to mid 100k's at best. It is indeed a depressing situation when the value of your home is almost 100k less than what it once was. But, these are the difficult times we are in. A buyer knows that if someone is selling in this market, it's usually because they have to sell, not because they want to. That being said, it is equally as important as a seller to set the market, not chase it. Price your home perfectly so it will sell quickly, and allow it to dictate the price that other homes will sell at. When I suggest a list price to the seller, he or she usually opts for something higher, and I let them know that being competitive is key! When their neighbor's condo is on the market for less, they better come up with a pretty amazing reason as to why their own condo is priced 20k higher. I then make them aware that if there is no interest after the first 10 days, we must reduce. A property priced too high for too long is missing out on valuable market time. That gives buyers the idea that you are not willing to negotiate, and it turns them away when the 'days-on-market' enter triple digits. When there is no interest in a property for an extended period of time, 9 times out of 10...it's the price. When my sellers who price too high ask me, "Nick, why isn't this selling?" I respond, "It's too expensive." To which they say in return, "Well, I don't want to reduce." I have given them my suggestion and that's the best I can do at that point.

Over the past couple years that I have been working in real estate, I have learned a lot about what to expect during a home inspection. When I go to a listing appointment, I take a long look around at the property and single out things that may be an issue later on down the road. By no means should the home owner take these suggestions personally, but sometimes they do. I try to get them to step outside of themselves and look at their home through the eyes of a buyer. Things that the owner has just been 'living with' are not necessarily what a new owner will be comfortable with. They can either take my suggestions or not, but it's important for me to put everything out on the table. A pre-inspection is usually a good idea before putting a home on the market, because this way the seller can address all inspection issues ahead of time, beat the buyer to the punch, and be ready for a quick closing.

Buyers are often ruthless in this market because they can be, and they know that the sellers need them more than they need the sellers. This is why a smart seller should do the pre-inspection and price their home intelligently, so they are always one step ahead of the buyer from square one. If you want to sell in this market, you MUST be proactive. Selling your home can be a full time job if you are not prepared, and we as Realtors are there to represent you and have your best interest in mind. Believe it or not, we may have some good advice that's worth following ;)

Times, They Are A Changin'

Times, they are a changin'! Technology is ever evolving. Computers are getting faster, phones are getting smaller, Facebook & twitter are the new forms of networking and communication. In fact, researchers have found that if Facebook was a country, it would be the 4th largest in the entire world. Why am I blogging about this, you might ask? Because, as a young real estate agent it is important to know how to enhance my business through the new ways of social networking. When 85% of all home buyers find their new home through the World Wide Web, having a large internet presence is one of the key factors to make it in this economy - and in general. Not just as a Realtor, but as a person in the business world, overall.

Before I continue on, let me just say that if you are one of the real estate agents who has been in the biz for 20+ years, and you have taken the time to evolve with technology instead of just sitting there with your head in your hands complaining about how you have no business...then I applaud you, and I implore to come along with me during this blog ride into the new millennium of real estate marketing!

I feel that I am one of the lucky ones. I grew up in a time when all of these new electronic outlets were (and are) still evolving. The average age of a Realtor is 55. In no way am I saying that's a bad thing. I'm saying that many of them do not want to make the transition to being more technologically savvy. Which is fine with me, because many of my clients are 30 somethings that like to text message and Facebook me, as opposed to having a good ol' fashion phone conversation. I cannot tell you how many times I have text messaged another Realtor, only to get nothing in response. They either don't know how to text, or they can't be bothered, and they don't want to take the five minutes to learn how. Don't worry, I will take those crazy texting clients off your hands for you! They're nuts, and you wouldn't want to work with them anyway, right? Everyday that goes by, is another day that the agents with that old school mind set will be left even further behind in the dust with outdated marketing techniques. Heck, even my 90 year-old grandmother knows what I'm taking about.

Many of these social networking sites have a negative stigma attached to them. I can see why they would - to a point - but they are what you make of them, and if you make them great for you, they will be great for your business. Facebook was initially created for college kids to keep up with their friends to see what classes they are taking, etc. Then, over time, it grew to a world wide phenomenon. In my opinion, a site with almost 1/2 a billion users can't be wrong. So, as a Realtor, putting your listings on Facebook is a NO BRAINER! In fact, they even have applications that turn portions of your Facebook profile into an all-out Real Estate page, just like you would see on sites like Realtor.com or the MLS. Instead of sending a virtual tour of a new listing somewhere out into cyberspace in hopes that it might find it's way onto a potential buyers desktop, why not literally put the listing report right in the lap of those potential buyers. Facebook, blogger.com, twitter, youtube, texting, etc, will do that. But no worries, real estate agents. If you don't want to be bothered with learning these techniques, I'll take on those wacky internet cyber weirdos and find them a new home. You can help the 15% of buyers that check the Sunday papers.

Another fantastic internet portal that I have grown to love, is twitter. Twitter asks one question: "What are you doing?" It has taken the simplest question ever known to the human race, and has turned it into a marketing goldmine! At first this site was seen as something for the kids as well. But over a very short period of time it has completely taken off into something that no one could have expected. And for real estate, it is pure genius. Think about it...it's FREE! Any leads you generate that turn into a sale is 100% pure profit. Find other Realtors all over the globe, post links to your personal websites, add pictures, post listings on TweetLister.com , find buyers & sellers in your area and connect with them...the possibilities are endless. Potential home buyers are all over these sites, so as a real estate agent in the year 2009, why wouldn't you want to be as well?

One last bone to pick, and then I will conclude this blog posting. How can a real estate agent in today's world function with a cell phone that does not have internet and e-mail capabilities? I see so many agents today with phones that look as if they were the first cell phone ever invented. No, let me rephrase that: I see so many agents today with phones that look as if they were the prototype for the first cell phone ever invented. Much like The Zack Morris Phone from "Saved By The Bell." They say that it takes the average Realtor up to three days to respond to a client lead. If they had a PDA phone like a BlackBerry, then this would not be a problem. I receive, on average, approximately 100 e-mails a day. If I had to wait until I was able to use a computer to respond to them, I would never do any business. When clients click on one of your properties, they are also clicking on dozens of others. Studies show that if you do not respond to a lead within 10 minutes, they have already found another real estate agent to work with. In fact, they have probably found me to work with because I e-mailed them back instantly using my BlackBerry.

I am finishing up my second year in real estate and because of my internet presence, marketing, and also the fact that I am on a Re/Max team that has the most traveled Realtor website in Northern New Jersey, I did 12 deals in my first year alone. The average real estate agent does three deals a year. I am now pushing 20 closed transactions. For a rookie agent, that is a great accomplishment, especially in a down economy. It will only get better as the housing market turns around, and I'm looking forward to working with YOU!

You can follow me at www.twitter.com/nickbaldwin1979
You can follow The Baldwin Dream Team at www.twitter.com/thebaldwinteam
You can find me on Facebook by clicking on my profile badge near the top of the blog on the right hand side.

Please watch this short video called "Social Media Revolution." It will blow your mind!

Sometimes It's Not Just a Business Transaction. It's An Emotional One.

When a home owner is selling their home after 30 or more years, it can be an extremely emotional ordeal. As I explained in my previous blog, many memories can be acquired over the years, and that home becomes more like a part of the family, rather than just four walls and a roof. So, when it comes time to move on and sell, the parting of ways can be excruciating.

For both buyer and seller, the process is like night and day. The buyer may have looked at 20 or more homes before they find "the one." To the buyer, the transaction is primarily business. They may love the home, but the emotional connection isn't there for them yet. They don't understand what it is like to part with something so emotionally huge as a house. The seller has kept up the home with love and care, and as they saw fit. So what if the furnace is 25 years old? It works, right? So what if the electrical is out-dated? It works, right? The seller has just gone day-to-day with these old and out-dated inner workings of the home, just letting them do their respective jobs, and has found no problems with them whatsoever. So, when a buyer comes in and does their home inspection and begins critiquing every nook and cranny, and making such comments like, "These floors are creaky." Or, "These carpets are old." Or, "The roof needs replacing," it can be insulting to the seller. The buyer may not intend for it to come out that way, but it can be taken to mean that the seller has not cared for their home in the manner in which it is expected. However, that is all a matter of opinion.

The thing is, buyers these days are ruthless. They are not here to make friends, and they will go to extremes to get what they want, even if it means they are not coming across in the best light. Their mindset (especially in this market) is that the seller "needs" them. It is highly unlikely these days that more than one offer will come in at the same time (or that a second offer will come in at all). Bidding wars are rare, and buyers are aware of that. In which case, they can become very demanding and over-bearing. They expect the world and refuse to compromise...even if the seller has come down substantially in price in order to get the home sold. Then, just when you think all is said and done, the buyer will ask for more, even when the seller has bent over backwards to accommodate. If you're lucky, a buyer will usually know when they are being out of line with their requests, and a Realtor can sense that. That is when saying, "Enough is enough!" is warranted.

When it comes down to it, if the buyer truly wants the house, both parties can come to see eye-to-eye. If you are able to break through the rough negotiation stages...you are in the clear. But, as a buyer, it will help you a lot more if you put yourself in the shoes of the seller and imagine what it must be like to close the book on a chapter that made for 50% of your life. If you are able to see it that way, the home buying experience can be a very joyous one.

---------------------------

Everyone knows that buying a home can not only be emotionally burdening, but it can be financially burdening as well. That is why I recommend that all of you read a wonderfully insightful financial blog by Andrew Yates. In his threads, he will teach you how to manage your money in non-traditional ways, and his writing style speaks to the masses. He makes finance fun and interesting, therefore preparing you for the future so you will be able to make and save that money to buy your first home. Check him out @ FinFod.SquareSpace.com.

Home Prices Are Declining, So Don't Take It Personally!

Bob and Mary have lived in their home for almost 40 years. It was their first major purchase together as newlyweds, and like many new home buyers, the feeling of this purchase was indescribable. They raised their children, Sarah and John, in this house, and soon the house itself was more like a part of the family as opposed to just four walls and a roof. The memories that took place in this house are worth more than anything money can buy. John's first steps, Sarah's first day of school, John's first little league win celebration, Sarah's first date coming to pick her up, and the list goes on and on...

Now that the 'kids' are out of the house and married with kids and families of their own, it's time to sell. The upkeep and maintenance of the home is becoming more difficult for Bob and Mary as they are getting older. So, they regretfully decide to put the house on the market to make room for a new family to start memories of their own. They decide to call a Realtor to come price their home, and they are appalled by the price that is suggested. "But, this home is our pride and joy," Bob proclaims, "We have lived here our entire married life! How is it not worth more?" Mary asks, confused. After a few sleepless nights of mulling it over, Bob and Mary decide it's best if they sell, knowing after all the upgrades and changes they made, the 2 roofs they put on, the landscaping and sprinkler system, and the central air they installed, that they will be lucky to make the kind of profit they saw for themselves a couple of years ago.

Despite the Realtor's suggestion, they list the home higher than what the comparable sales in the area are averaging. For the first few weeks there are absolutely no showings while other homes in the neighborhood are selling. Their Realtor tells them that they will have to reduce. Sales are declining at a rapid pace, and Bob and Mary are missing out on valuable market time. They reduce the price by $20,000, and the showings start to pick up. Finally an offer comes in...at $25,000 under the new reduced asking price, but Bob and Mary are insulted by this offer and they reject it. Their Realtor begs them to consider a counter offer, and tells them that if they don't work with this offer they should be ready for many more lower offers to come in. And, he is right. The next offer comes in at $60,000 under the asking price, and Bob and Mary are beside themselves with anger, regret, and confusion. After a few short negotiations, they arrive at a selling price of $45,000 under the asking price. At this point, when all was said and done, Bob and Mary's house -- their nest egg -- had been undercut by the ailing economy. But they still have their memories.

This example is not too far fetched, and it's a depressing story that we, as Realtors, encounter on a daily basis. The declining market does not discriminate. It does not care that Bob and Mary have built not just a home here, but a life. Buyers today are extremely market savvy. They watch all the real estate shows, they keep up with housing prices, and they are fully aware that anyone who is selling in this market is selling because they HAVE to - not because they want to.

Obviously, as a Realtor, I want my sellers to get the most for their home that they possibly can. However, there are many obstacles standing in their way these days when it comes to achieving that goal: home inspections, appraisals, and of course, the ability of the buyer obtaining a mortgage. Taking all of that into account, sometimes the best scenario is to let it go and leave the past behind. It's sad, but true.

The Top 10 Worst Property Photographs (according to me)!

There are so many Realtors out there today who constantly complain that they haven't sold a house in months, and part of that reason is because their photography skills are terrible. The first impression is everything when selling real estate, and the first impression is usually the photographs. 85% of all homes are sold by buyers surfing the web. Therefore, image is everything. If bad photographs are attached to a home for sale making it look less desirable, then the potential buyer will quickly move on the next property. I have compiled my list of the Top 10 Worst Property Photographs on the internet today. Enjoy!

10

It's a corner of a room...I think. Not sure which room, exactly. But at least it's in focus, right?



9
I think there's a house behind that tree, but I'm not quite sure.



8
The cherry blossom's are beautiful. But last I checked, it's the house that's for sale, not the trees.



7
That's a snow covered pool, or a huge ditch in the backyard. Either way, Winter is over.



6
Is this a house for sale, or a prison cell?




5
Realtor Rule #343: Never take photos while intoxicated!



4 For Sale: Wonderful Home. Windows Sold Separately.




3 Messy? No...it looks fine. No one will notice. Don't worry!



2
Does that pile of underwear on top of the ironing board come with the house? Maybe that person on the far left was about to clean up, but they snapped the picture to quickly.


And you're #1 Worst Property Photograph (according to me), is...

1The Blurry Living Room! I guess this Realtor forgot to wear his glasses that day.

First time buyers: What they want vs. What they can really afford. The all-telling mortgage pre-approval.

First time buyers: We all have them. We all love them (hopefully). We all NEED them. Especially in the crazy market we're in these days. They are among the only ones still out there, motivated enough to take advantage of the low interest rates and the $8,000 first time home buyer tax credit. They are a little wet behind the ears, and most of the time they expect the world. That's why it's my job as a Realtor to educate them and make them aware of the reality of home buying. A lot of them (in my experience, at least) are looking to buy in the 250k to 400k price range. What has to be understood about the New Jersey area, is that most of the time, buyers will not be paying for actual house. What they will be paying for is location. I know you have heard "location, location, location," many times before. But the phrase rings the truest in the Northern New Jersey area. To live in Northern New Jersey, in a suburb close to NYC, with a commute of 40 minutes or less to Mid-town Manhattan, in towns like Montclair, Glen Ridge, Maplewood, and Livingston, one cannot expect to spend $350k and expect a mansion with the tennis court, Olympic-size pool, state-of-the-art gym, 8-car garage, live-in butler...but I digress. As much as I would like it to, it is just not happening. To most first timers, it's a harsh reality. This is why I cannot stress enough why obtaining a bank pre-approval is more important now, than ever before.

* * * *

Above, $400,000 home in Oklahoma.

Above, a $400,000 home in Northern New Jersey.

* * * *

For some reason, obtaining a bank pre-approval seems to be a scary thing for buyers. Personally, I have not been able to figure this out. This is why I always recommend a lender that I work with and trust, for them to get in touch with. It's a 10-15 minute phone (or in person) conversation, and at the end of that conversation they will walk away knowing how much they can afford to buy their home. It really is a fantastic piece of information to have, because it takes the guess work out of everything.

Here is a little secret: For a rough estimate to figure out your price range, just take your annual salary and multiply it by 4. Believe me when I say this: it is a very, very, rough estimate. It does not take into account your current debt or credit score, so I don't suggest using it as the end-all and be-all. Banks, these days, are not taking the risks that they used to when granting the pre-approval amount. I mean, can you blame them? A lot of the major banks are in hot water, with people foreclosing on their homes left and right.

Another reason why pre-approvals for first-time buyers are so important- is because it avoids disappointment. I cannot tell you how many times I have worked with clients who were unprepared, and we were looking at houses that turned out not to be anywhere near their price range. They waited until they found their dream home to get pre-approved, only to find out that the home was too expensive. There is no point in falling in love with a property, only to find out that you can't afford to buy it. As a buyer, you may think you know what your price range is, but the bank may disagree. After all, it's their money you are borrowing.

I will leave you with one little piece of advice until next time. Many buyers make a common mistake of making a huge purchase before they get their mortgage commitment. They go out and buy a car, or put an expensive vacation on their credit card that they're not able to pay off immediately. I advise all of my clients who have plans to purchase something big, other than the house, not to do so until after the closing. The bank will see it as additional debt, and they will take that mortgage commitment away from you just as quickly as they gave it out. My advice: house first, new car second! Thanks for reading :)

Next Week: The Top 10 Worst Property Photos Taken By Realtors (in my poinion, of course)!

First Time Buyers

As a young Realtor in this market I am very in touch with the first time buyer demographic, being that I am that demographic. 30...ish years old. So, I find myself dealing with a lot of hesitant, nervous, and scared clients. There is nothing at all wrong with that, and over the past couple of years I have learned to become more nurturing, understanding and patient...very, very patient. If you don't have patience, real estate is not the business for you. Especially in this market.

They say the average home buyer looks at 7-10 houses before making their decision. One thing I have realized is that first time buyers are not your average buyer. They have nothing to compare previous homes to, therefore they tend to look at 20-30 homes before making a decision. They tend to make excuses for why they shouldn't buy, and why they don't like something. But that is all a part of their charm. "This room is pink. I don't like pink." Or, "My cat won't like to look out these windows." Yes, I have heard it all. But it's only nerves and I have become accustomed to it and have answers for preeetttty much everything they balk at.

I was recently working with a really great couple. I am actually still working with them, but we're waiting for the condo they are purchasing to close. For this blog's sake we will call them John and Jane. John and Jane are not from around the NY/NJ area, so they really didn't know what to expect. What they did know is that they wanted new construction: 3+ bedrooms & 2+ bathrooms for under 400k. Doable...yes. Difficult...YES! Especially in these here parts. The very first day I took them to see new condos, they absolutely fell in love with the first thing they saw- 2 beds / 2 baths, top floor, balcony, 1500 sq. ft., top-of-the-line kitchen, hardwood floors, and designer lighting, all in a town with a NYC direct train for 359k! This is unheard of, even in this economy. Now, many "Property Virgins" think for some reason they have to keep looking...and looking...and looking, because there is no way they will find the condo of their dreams (if there is a such thing in a condo) in their first week of house hunting (The average person will live in their first condo for no more than 5 years, by the way). Usually people keep looking because their friends and family feed them 'advice' about the market and the only person they do not easily hear is their Realtor.

Now, one thing you must remember about new construction-condos is that, after a while, all the floor plans merge into one - they are that similar. You walk in and the kitchen is directly to your right or left. It's generally a galley kitchen with a breakfast bar that opens up into the living/dining area. Then the bedrooms are off to the side down a hallway, or in some cases directly off the living area. Pretty standard, and all the materials are basically the same. Stainless steel appliances and granite kitchen counters, etc. In the end, location usually plays a huge part in determining price.

I mentioned before that the condo that John and Jane loved was in a train town with a price under 400k. The train is a good 1.5 miles from the property so they would need to take the town shuttle or drive and park at the station. That is the prime reason as to why the price was so amazing. About 3 months into my condo search with John and Jane, we were walking through a beautiful 3 story townhouse. I stopped dead in my tracks and I turned to them and said,

"OK, guys. We have seen upwards of 30 properties. They all look the same after a while, so it's now a matter of location. I know you love the very first condo we saw because you keep comparing it to everything else we see. I honestly think that you and I both know what you want."

It may have come out blunt...but it worked! You see, the longer a buyer looks at houses, the less likely they are to buy (informal statistics kept by our Team). All the properties get jumbled around in their brain and they get frustrated and overwhelmed. It's my job to not only find them the perfect home, but to keep them sane and focused during the entire process. The very next day they called me, we wrote up an offer and we are closing very soon. After 30 condos, they are purchasing the very first one they saw. I knew that it was right for them (and so did they). They just needed that extra push and validation that all first time buyers need. Rates are historically low in this market, prices are dropping, and with the $8,000 new home buyer tax credit they will receive, it's incentive enough to buy in this shaky economy.

Many Realtors become fed up with their first timers and refuse to work with them, but it's very important not to have that mind set. These people are the building blocks of a new agent's business. These are the people who will buy their 2nd, 3rd, and 4th home from you. These are the people who refer family and friends to you. And starting out in the real estate business, you need to build that client base and work with clients who will teach you things just as much as you teach them. And in order to build that client base, the #1 ingredient you need to instill in all of your clients is TRUST. John actually said to me in a phone conversation when I suggested something regarding the offer, "Nick, I trust you. If you think it's right I will do it."

If your first time buyers think for a second that you have not considered their fears, needs, and concerns, and are only interested in your pay day, it will never work out. Obviously, a commission is nice, but buying a home is quite possibly the largest and most important purchase someone will make in their lifetime. I am honored to be a part of that process and the knowledge they will never forget that I helped them find their first home. That's why I love my job!


NEXT WEEK:
First time buyers: What they want vs. What they can really afford. The all-telling mortgage pre-approval.