Get Satisfaction From Your Internet Search

Everything you read these days about Buyers and their Home Search mentions the Internet. A majority of people seem to start there. However, between the number that begin there, and the number that end by purchasing a home, there is a world of difference. Many articles speak of how unhappy buyers are with the lack of response from Realtors they email.

The numbers are astounding! 70% begin their search but only 15% purchase! There must be a reason for this huge disconnect. Doing an Internet search for a home is attractive to many consumers because they don't have reveal their identity. They can surf from city to city looking for the perfect neighborhood at a price they would like, or they can dream search to find a house to plan ahead for!

Asking anonymous questions is easily done, but getting them answered is a different story. The disconnect comes from the type of communication Realtors are getting. Anonymous questions are fine, but if the question is not structured right, or written clearly identifying what it is the consumer is trying to do, the communication will be dis-guarded as bogus, unworthy and a general annoyance. So like the boy "who cried wolf too many times" real estate leads are being ignored. Thus consumer dissatisfaction with the system. This is too bad!

As an Internet savvy Realtor, I would like to offer a few suggestions to the Consumers out there who genuinely want to communicate via email. The people who get and keep my attention are the consumers who introduce themselves to me and tell me what it is they are interested in doing. It's very much like meeting someone face to face, shaking hands and sitting down with a nice cup of hot coffee.

Make me feel you are a REAL person and I will assist you as best I can. You will have my attention. As a Realtor I don't expect to make a sale from everyone I assist. I enjoy helping people just for the sheer "thank you" I receive. Solving problems and teaching people about the Chicago real estate market is what I do. Along the way I sell houses.

I can't speak for my colleagues, but I would bet they feel very much the same way. Our ears love the sound of "thank you". We are only human after all!

The Price Is Right!

It has never been easy to price a home. These days it is more difficult than ever before. Buyers see everything on the market as being over priced and no one offers full price any more.

If a home is priced at or slightly under market value it will attract buyers and have showings but offers on it will be for less than the asking price, sometimes for as much as 10% below the asking price. It isn't a good strategy to price the home at over the market value to help sellers get their bottom line. Homes that are over priced by any amount do not getas many if any showings at all. Without any showings there are no offers and the home sits on the market month after month. The marketing expertise and work style of your Realtor is more important than ever to get your home exposed to the maximum number of prospective buyers. It's a bit of a numbers game. The more people that see the home, the more likely you are to find the buyer that's right for it. However, even the best marketing and the savviest Realtor won't compensate for overpricing.

Market times are longer than they used to be but homes are being sold every day. The homes that sell are those that are properly priced. It works the best to set a price that is slightly below market value. It will get showings and offers but usually those initial offers will come in low. The good news is that once an offer comes in it can be negotiated up. Buyers seldom make their very best offer on the first round and they will negotiate. I like to think of low ball offers as opportunities. Again, the skill of your Realtor is critical here; good negotiating skills and providing good guidance to the seller is of the utmost importance. One thing that I am strongly recommending to my sellers in today's market is always to counter an offer, and only to reject if they're truly absurd.

The true value of a house is what a buyer will pay for it and it is buyers, or the market as we say that dictates the value of real estate, not the seller. Sellers have to be ready to play the pricing game and Realtors have to be willing to go that extra mile to recommend a price that is low enough so that buyers will see the home, but high enough so that when an offer does come in it is possible to negotiate it up to an acceptable amount.

Sellers need to understand that no matter what price they set buyers will offer less unless the price is so low that the home gets multiple offers and buyers raise the price by outbidding each other.

Leading Economist Predicts Housing Market Upturn in 2nd Half 2008

Buyers who have been sitting on the fence, thinking that a better deal will be found at the end of this economic rainbow, may want to consider leading consumer economist’s latest predictions.

Lawrence Yun, Chief Economist of the National Association of Realtors, predicts that “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” he said.

“We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”

He does not predict the market to continue it’s slippery slide for a prolonged period. Little change is expected in existing-home sales over the next few months before improving notably during the second half of the year, according to the latest forecast by the National Association of Realtors®.

One of the leading indicators that economists view to judge the strength of the housing market is “The Pending Home Sales Index” which measures the number of contracts signed in a given period. The slip in pending home sales in February was not as great as expected, slipping only 1.9% from January. Yun says that this would indicate that the deep sales declines do indeed appear to be over.

“The aggregate existing-home price will probably ease by 1.4 percent to a median of $215,800 for all of 2008 before rising 3.7 percent to $223,800 next year. The median new-home price will probably fall 3.6 percent to $238,400 in 2008, and then rise 4.0 percent next year to $247,800.”

When you combine this with predictions for upward trends in the interest rates, waiting to buy may mean higher monthly payments to the average home buyer. The 30-year fixed-rate mortgage, which has fluctuated recently, should average 5.8 percent in the second and third quarters, but trend up to an average of 6.3 percent in 2009.

“The economy will not grow in first half of the year,” Yun said. “However, the combination of recent fiscal stimulus enactment and the lagged impact of monetary policy will help jump start the economy in the second half.” Growth in the U.S. gross domestic product (GDP) is expected to be 1.4 percent in 2008 and 2.4 percent next year. The unemployment rate is forecast to average 5.4 percent this year and 5.6 percent in 2009.

As buyers and sellers contemplate the current housing market, it is important to remember each area is unique and every region will respond differently to the various factors at work, and keep in mind, that much of the media coverage includes those areas which had a much steeper decline, because they were far more “overheated” than the Chicago market. Overall, it looks like there’s an optimistic future for existing home sales nationwide, which may mean an even faster rebound in the Chicago area for residential real estate sales.

What Is Buyer’s Agency? Should I have a Buyer’s Agent Represent Me in My Search for a New Home?

Some home buyers don't want to sign a buyer's broker agreement with a buyer's agent until they get to know that agent. But many buyers agents refuse to show property unless the buyer has signed a buyer's broker agreement. This sounds like a Catch-22 situation, doesn't it?

Part of a buyer's reluctance stems from the fact that many buyers do not understand why agents want them to sign an employment agreement, because buyer's broker agreements have not always been considered standard in the real estate industry. For years, buyer's agents and buyers worked together on a verbal promise. But that ship has left the dock.

Growing numbers of buyer's agents today sign agreements with their clients. It protects the agent in case the buyer decides to switch agents, and it lays out the duties the agent is supposed to perform for the buyer. It also establishes representation, which is generally a wise move for a buyer who wants to avoid dual agency.

Here are workable solutions for buyers who may have concerns about being locked into hiring the first agent who comes along waiving a buyer's broker agreement . . .

Should Buyers Sign Exclusive Broker Agreements With a Buyer's Agent?
Ask any buyer's agent who has been practicing real estate for a while, and you'll hear sad stories from those buying agents who wished they had signed a buyer to a buyer's broker agreement. In defense of buyers, however, it's rarely the buyer's fault. It's the agent's fault for not explaining how the business works.

What often happens is an agent will work with a buyer for a few weeks to several months or longer. This effort includes:

• Introducing the buyer to lenders and obtaining loan preapproval letters


• E-mailing listings that fit the buyer's requirements


• Calling listing agents to determine availability


• Making appointments with sellers before showing homes


• Driving the buyer from one neighborhood to the next, sometimes touring up to 10 homes a day

Then one day the buyer calls, in breathless excitement, to announce that he and his wife had driven by a new neighborhood, stopped to look at an open house and because there was a lot of interest in the property, they signed a contract to buy a new home from directly from the listing agent.

Buyer's Agents Expect Compensation
Just as listing agents sign formal listing agreements with sellers, buying agents expect formal agreements, too. Like listing agreements, buyer's broker agreements are typically bilateral, which spell out the rights and duties of both parties. Because bilateral contracts are essentially a promise for a promise, if the agent doesn't perform, you may have the right to fire the agent. It is typical for the compensation to come from the cooperating fee offered by the Seller to pay the buyer's agent.

Finding a Buyer's Agent
Many buyers are referred by family, friends or co-workers to a buyer's agent. A referral is the best way to find an agent. However, buyers who are relocating to a new area rarely have the luxury of building contacts quickly enough to trust a referral source. Alternatives buyers can use to find an agent are:

Internet Searches
By finding online listings of homes for sale, a buyer can quickly figure out which agents in certain neighborhoods list most of the homes. But that would mean those agents are likely to specialize in seller representation and not buyer representation. Instead, run keyword searches such as "Chicago buyer’s agent" from a search engine. You can also search Web sites where agents maintain national profiles such as activerain.com or realtor.com, in addition to finding exclusive buyer brokerages that specialize solely in buyer representation and do not take listings at all.

Open Houses
An agent hosting an open house may or may not be the listing agent. You should ask. Open houses provide an excellent opportunity to interact with the agent and find out more about the agent. If a certain agent appears knowledgeable and your personalities mesh, ask for a business card. Then later, look up the agent's Web site for more information.
It's common for agents to expect a buyer to sign a buyer's broker agreement, but many buyers need to feel comfortable with an agent before signing. Sometimes buyer's who are referral clients feel less concerned, because they know the agent has performed well for their friend or family member.

Interviewing a real estate agent can help to ease a buyer's uncertainty. But many buyers are leery of signing agreements because they are concerned that the relationship might not work out. They don't want to be stuck with a crummy agent, and that's understandable. Here are a few precautions you can take to relieve that anxiety:

Ask For the Length of Agreement You Would Like
The term of a buyer's broker agreement is negotiable. Although many agents might request a 90-day commitment at minimum, you are free to ask for a seven-day, 30 day or a 45 day term; it's whatever you can negotiate.

Request a Non-Exclusive Agreement
These agreements provide compensation to the agent if you decide to switch agents midstream and buy a home introduced to you by the first agent. It protects the agent by establishing procuring cause. But you are free to pursue any other homes with another agent.

Compromise
You can tell the agent that you prefer to spend a little time getting to know the agent before signing an exclusive buyer's broker agreement. It's reasonable to say, "Let's spend an afternoon looking at homes, and if I think we can work together, I will sign an agreement with you before we go out again." I would caution against working with an agent who is too eager to work with you before she has interviewed you, as well.

Specify Areas and Terms
Most contracts contain a description of the property. If you are undecided about areas, you might want to specify the terms and area in the contract, which will allow you to work with other agents in other areas or at different terms. For example, you might specify a price range or a neighborhood. If you later decide you do not want to buy a home in that price range or in that neighborhood, you can choose a different agent to show you homes in another price range or new area.

Ask For a Guarantee
I give my clients a guarantee. Many agents will accommodate that request if you ask. That means it's a two-way street. I guarantee buyers that if either of us decides that the relationship is not working out, and we have made an effort to communicate the problems and correct them, or if our personalities clash, I will release them from the agreement, and they can do likewise. That way you're not cemented to a business arrangement if the agent is too pushy, argumentative or stubborn, and I'm not just talking about myself.