Real Estate Information

How to Avoid the Most Common Mistakes When Selling

Thursday, November 29, 2007

by Michael Peron

Follow these steps to avoid the common mistakes that cost sellers valuable time and money.

1. Carefully Select Your Agent

Not all real estate agents are the same. Be sure to interview multiple agents (at least three) to find the one best suited to you and your situation. Look at their experience and approach to home selling. What is their selling record: number of homes sold in the last year, average number of days their listings are one the market, etc.? During the interview, a good agent should provide a Comparable Market Analysis (CMA) detailing the properties currently for sale in your area and those that have recently sold. This will help you to set your price.

2. Have a Broad Marketing Strategy

In today's fast paced, technologically savvy world, traditional sales techniques are not enough. Agents who use innovative strategies to attract homebuyers will always outperform those who rely on traditional methods. Today's housing market demands 24/7 exposure.

3. Cater to the Convenience of the Buyer

People are accustomed to convenience. This is just as true for home buyers. One of the simplest things you can do is to make your home as accessible as possible. If buyers are too restricted when making an appointment, they will look elsewhere. This is especially true if someone is relocating and only has a short time in which to find a house. This is definitely the type of buyer you want to court.

4. Negotiate with Pre-approved Buyers Only

It is best to work with buyers that are pre-approved. Pre-approval is a lender's guarantee of how much they will loan an applicant. So before you being negotiations, you can be assured of their ability to secure financing. This will prevent you from having your home tied up in fruitless negotiations. Your real estate agent will also be helpful in determining if the buyer is serious or if they are just casually looking to see what is available.

5. Set a Realistic Price

It may seem counterintuitive, but homes that are priced high tend to take longer to sell and often for a lower price than if they had been priced realistically. Buyers and their agents are typically quite knowledgeable about the market and will have a good idea when a house is overpriced. When a house lingers unsold it becomes stale in the minds of real estate agents. It will then take more effort to attract buyers. Conversely, pricing a home too low can lose you thousands of dollars in profit. The Comparable Market Analysis is the best tool to help you understand the current market and make the most informed pricing decision.

6. Maintain a Spotless House

A bad first impression is impossible to correct. Wouldn't it be terrible to lose an interested buyer because of a dirty bathroom, cluttered kitchen, unkempt lawn or unpleasant odors? Poor housekeeping can overshadow even the most competitively priced house. Not only is it important to do a thorough cleaning before the house is placed on the market, you must maintain it in this condition until it sells. Unless a buyer is truly imaginative, it is hard to look past someone else's dirt to see a home's true potential.

7. Complete All Necessary Repairs

Before you put your home on the market, thoroughly inspect it for any necessary repairs and have them completed. It can make the difference between a sale and a home that remains on the market for months on end. Just like a clean house, a property with no obvious repair needs will be more attractive to buyers. Repairs that are made as a condition of the sale can also cost as much as three to five times what they normally would. Under such tight time constraints, you can't always search for the best price and you may have to pay rush fees when hiring a contractor.

8. Be Professional

In addition to a clean and tidy home, you need to learn what to say and do during a showing. One wrong comment could turn away a potential buyer. Always act courteous and friendly. You want to appear approachable so buyers will feel comfortable asking you questions. However, you don't want to hover. That can make them feel uncomfortable or rushed. Give them as much time and space as they need to scrutinize your home. Leaving the house altogether is usually the best solution.

9. Use Logic in Your Decision Making

During the home selling process it is best to remain as logical as possible. If a buyer criticizes your house, remember not to take it personally. They are not criticizing you but simply trying to consider all aspects in order to make the most informed decision. Homeownership is one of the biggest financial transactions most people experience. This is bound to cause some anxiety. Don't be pressured by these emotions.

10. Learn the Market

The real estate market fluctuates based on supply and demand. Markets can also vary from neighborhood to neighborhood within the same community. The more your learn the better prepared you will be to make the necessary decisions.

ShortSales Assessing the Deal

Wednesday, November 28, 2007

by Michael Peron

One of the most important parts of your service will be to adequately assess your client’s situation. You must determine what the client’s current situation is before you can offer a solution to their problem.

Your assessment must be correct in order to make appropriate recommendations. Mortgage lenders will not have any confidence in your recommendations and will be unwilling to negotiate with you if your assessment is not correct.

The first step in your assessment is to determine how delinquent the client is with their mortgage payments. You can use the lender’s correspondence as a starting point. The lender will have sent the client correspondence demanding payment, which should include the monetary amount of the delinquency. You will want to double check this figure, since it is possible the lender or client made an error. It is also possible that another payment may have come due since the last correspondence with the lender.

You can determine the amount in arrears by using the client’s payment book. Determine the client’s monthly mortgage payment plus late charges, because the client will be assessed these fees (normally 4% to 5% of the mortgage amount) as a result of their delinquency. Determine how many months the client is behind. Multiply the payment (with late charges) by the months the client is behind, which should equal the amount in arrears, plus or minus late fees and miscellaneous fees or costs.

Lender Inspections

Some of the costs, other than accrued late charges, could be inspection fees. Inspections are required by banks, investors, or government regulation. The purpose is to ensure the property is occupied, in good condition, and/or to provide notice to mortgagor of the lender’s attempts to contact them. The mortgagor thinks that the lender has come to their door. Actually the lender usually hires another party (independent contractor) to provide the specialized service.

Normally the inspection is required to be performed once the loan is 60 days behind. Drive by inspections are done without the mortgagor ever knowing, unless the inspection is a LSR (lender service report) with contact. The inspector has to make an attempt to contact the mortgagor and leave a note to contact their lender immediately. If this is your client, they will call you and be stressed that someone came to their door when you are apparently working on their case. Let them know the inspection is out of your control and is routine and that they should not contact the lender because you are working on the case. You may want to inform your client ahead of time that this may occur while you are working on the case. This way, they are prepared for any unforeseen appearance by an inspector.

Payment + Late Charge x Number of Months Delinquent = $ Delinquency

For instance, let us assume the client’s mortgage payment is $700 a month and they are six months behind. Their payment book lists a late payment as $735, if a payment is made after the 15th of the month. The $735 late payment x 6 months delinquency = $4,410 in arrears. If the lenders demand letters do not list the amount of the default, you will have to trust the client’s figures. The mortgage company will let you know what the actual amount of the default is, if the client is not correct.

Monday Morning Coffee

Monday, November 26, 2007

by Michael Peron

"There are two ways to look at life. One is as though nothing is a miracle; the other is as though everything is."

~ Albert Einstein

RETURN THIS GIFT, PLEASE!

One major holiday down, at least one more to go, and then it’s the New Year. At this time of year, it’s very easy to get caught up in expectations and to lose sight of reality. Some are trying to squeeze an entire year of visits with friends and family into a one-month time frame, while others may be experiencing that certain melancholy that attends the circumstance of not having friends or family with whom to share the joy of the season.

Why do we feel so overwhelmed during these last months of the year? Partly, it’s the impression that society has commercialized what should otherwise be an opportunity to gather in love, fellowship and gratitude. Regardless of the warmly glowing lights and the gifts wrapped in glittering paper and bows, the magic is absent.

Skeptics of the season find that “nothing is a miracle,” because they feel that the significance and majesty of our holidays have been sucked dry by high prices and higher expectations. However, there are those lucky folks out there who have found that everything is a miracle, not just at the holidays, but also throughout life.

It’s time to put on your “miracle goggles” by shunning the exchange of piles of presents and avoiding the bright and shiny department stores. Those things simply confirm our worst suspicions, and rob us of the joy we’re supposed to feel and share with others.

This year, your gifts to friends and family could take the form of donations to charitable organizations, given in their name. If you give it some thought, you’d recognize that everyone you know has some cause for which they feel strongly.

Remember that Philanthropy always comes in the right size and color, and never needs dusting or ironing. If you’re lucky, this gift just might be returned!

The Real Estate News Wire

Friday, November 23, 2007

by Michael Peron

Real Estate Market Update

The National Association of REALTORS (NAR) reported in late October that recent problems within the mortgage markets are improving and expected to ease demand. Once demand begins to move, home sales will begin to rise again and prices will slowly edge back up. Overall, September saw the national market for existing homes fall by 8%. Although the home sales fell, third quarter sales were better than forecasted with a 5.42 million annual rate versus the 5.38 million previously forecasted by NAR.

Average (Mean) Sales Price of Existing Homes by Region

Date	U.S.	Northeast	Midwest	South	West
2004	$244,400	$273,600	$189,400	$215,600	$324,300
2005	266,600	297,000	203,800	231,700	363,800
2006	268,200	299,700	205,300	230,000	371,300

05/07	270,600	313,200	204,300	229,700	372,000
06/07	276,500	318,900	210,600	237,500	375,200
07/07	276,000	317,200	214,800	232,600	376,400
08/07r	269,300	310,100	210,300	228,600	364,900
09/07p	257,800	294,700	203,900	217,900	347,300

Statistics from the National Association of REALTORS®

Lawrence Yun, NAR senior economist, said the decline is understandable. "Mortgage problems were peaking back in August when many of the September closings were being negotiated, and that slowed sales notably in higher priced areas that rely more on jumbo loans," he said. "The good news is that mortgage availability has markedly improved in recent weeks with interest rates on jumbo loans falling, and more people are applying for safer and conforming FHA mortgage products. Some of the cancelled transactions will move forward as buyers apply for other loans."

According to Freddie Mac, the national average 30-year fixed rate loan averaged 6.38 percent through September. Higher home inventories and lower interest rates combine to make this a great buyers market!

Stay Warm, Stay Safe!

As temperatures start to drop nearly half of American families will turn to alternative sources to heat their homes. Make sure you’re ready to heat your home safely and effectively.

Have your chimney professionally inspected. Buildup from last year's fires can be dangerous if not cleaned regularly.
Keep your fires behind screens and never leave them unattended. Always extinguish fires before going to bed or leaving the house.
Ensure that any space heaters are away from flammable objects and placed on a level surface. By turning off space heaters when leaving the room or going to sleep, you save energy and increase safety.

By following these common sense tips, your home can remain warm and safe throughout the winter months!

Getting Started Tips For Homebuyers

Thursday, November 22, 2007

by Michael Peron

2. HOW DO I BEGIN THE PROCESS OF BUYING A HOME? Start by thinking about your situation. Why do you want to buy a home? How much can you afford in a monthly mortgage payment (see Question 4 for help)? How much space do you need? What areas of the town do you like? After you answer these questions, make a "To Do" list and start doing casual research. Talk to friends and family, drive through neighborhoods, search for new listings on search engines (Yahoo and Google), and look in the "Homes" or "Real Estate" section of the newspaper.

3. HOW DOES PURCHASING A HOME COMPARE WITH RENTING? The two don't really compare at all. One advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity; take advantage of tax benefits; and protect yourself against rent increases. Also, you may not be free to decorate or remodel without permission and may be at the mercy of the landlord. Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that's an investment! Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities: like insurance, real estate taxes and upkeep, which can be substantial. But given the freedom, stability, and security of owning your own home, the new responsibilities are worth it.

4. HOW DOES THE LENDER DECIDE THE MAXIMUM LOAN AMOUNT THAT YOU CAN AFFORD? The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should total no more than 41% of income. When determining your maximum loan amount, the lender also considers cash available for down payment and closing costs, credit history etc.

5. HOW CAN I DETERMINE MY HOUSING NEEDS BEFORE I BEGIN THE SEARCH? Your home should fit the way you live: with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities: things like location and size. Should the house be close to local schools, your job, or public transportation? How large should the house be? What type of lot do you prefer? What kinds of amenities are you looking for? Establish a set of "minimum requirements" and a 'wish list." "Minimum requirements" are things that a house must have for you to consider it, while a "wish list" covers things that you'd like to have but aren't essential.

FINDING YOUR HOME

6. WHAT SHOULD I LOOK FOR WHEN DECIDING ON A COMMUNITY? Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people who live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable.

7. WHAT SHOULD I DO IF I'M FEELING EXCLUDED FROM CERTAIN NEIGHBORHOODS? Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD's Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777 (and 1-800-927-9275 for the hearing impaired).

8. HOW CAN I FIND OUT ABOUT LOCAL SCHOOLS? You can get information about the school system by contacting the city or county school board or the local schools. Your real estate agent may also be knowledgeable about schools in the area.

9.HOW CAN I FIND OUT ABOUT COMMUNITY RESOURCES? Contact the local chamber of commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information. You may also want to visit the local library. It can be an excellent source for information on local events and resources, and the librarians will probably be able to answer many of the questions you have. The web can be a good resource for community information. Ask your agent to send you a list of community resources on the web.

10. HOW CAN I FIND OUT HOW MUCH HOMES ARE SELLING FOR IN CERTAIN COMMUNITIES AND NEIGHBORHOODS? Your real estate agent can give you a ballpark figure by showing you comparable listings. If you are working with a REALTOR, they may have access to comparable sales maintained on a database.

11. HOW CAN I FIND INFORMATION ON THE TAX LIABILITY FOR A PROPERTY? The total amount of the previous year's property taxes is usually included in the listing information. If it's not, ask the seller for a tax receipt or contact the local assessor's office. Tax rates can change from year to year, so these figures may be approximate.

12. WHAT OTHER TAX ISSUES SHOULD I TAKE INTO CONSIDERATION? Keep in mind that your mortgage interest and real estate taxes will be deductible. A qualified real estate professional can give you more details on other tax benefits and liabilities.

13. WILL AN OLDER HOME PROVIDE BETTER VALUE THAN A NEW ONE? There isn't a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer better ambiance and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry about upkeep and repairs for the first few years.

14. WHAT SHOULD I LOOK FOR WHEN WALKING THROUGH A HOME? In addition to comparing the home to your minimum requirement list and wish list, use the HUD Home Scorecard and consider the following: Is there enough room for both the present and the future? § Are there sufficient bedrooms and bathrooms? § Is the house structurally sound? § Do the mechanical systems and appliances work? § Is the yard big enough? § Do you like the floor plan? § Will your furniture fit in the space? Is there enough storage space? (Bring a tape measure to better answer these questions.) § Does anything need to repaired or replaced? Will the seller repair or replace the items? § Imagine the house in good weather and bad and also in each season. Will you be happy with it all year round? Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.

15. WHAT QUESTIONS SHOULD I ASK WHEN I START LOOKING AT HOMES? Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure that the answers you get from the seller or real estate agent are clear and complete. Ask questions till you understand all the information that they have given you. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list.

16. HOW CAN I KEEP TRACK OF ALL THE HOMES I SEE? If possible, take photographs of each house: the outside, the major rooms, the yard, and extra features that you like or ones you see as potential problems. And don't hesitate to return for a second look. Use the HUD Home Scorecard to organize your photos and notes for each house.

17. HOW MANY HOMES SHOULD I CONSIDER BEFORE CHOOSING ONE? There isn't a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, homebuyers see 15 houses before choosing one. Just be sure to communicate often with your real estate agent about everything you're looking for. It will help avoid wasting your time.

YOU'VE FOUND IT

18. WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME? An inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware only of repairs that are needed. The Inspector does not evaluate whether or not you're getting good value for your money. Generally, an inspector checks (and gives prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector who is qualified and experienced. It's a good idea to have an inspection before you sign a written offer, because, once the deal is closed, you've bought the house "as is". Or, you may want to include an inspection clause in the offer when negotiating for a home. An inspection clause gives you an "out" on buying the house if serious problems are found, or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

19. DO I NEED TO BE THERE FOR THE INSPECTION? It's not required, but it's a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd like to purchase and it is a good time to ask general maintenance questions.

20. ARE ANY OTHER TYPES OF INSPECTIONS REQUIRED? If your home inspector discovers a serious problem a more specific inspection may be recommended. It's a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas, asbestos, or possible problems with the water or waste disposal system.

21. HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOUSE? If the house you're considering was built before 1978, and you have children under the age of seven, you will want to have an inspection for lead-based paint. It's important to know that lead flakes from paint can be present in both the house and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

22. ARE POWER LINES A HEALTH HAZARD? There are no definitive research findings, which indicate that exposure to power lines can result in greater instances of disease or illness.

23. DO I NEED A LAWYER TO BUY A HOME? Laws vary by state. Some states require a lawyer to assist in several aspects of the home buying process, while other states do not, as long as a qualified real estate professional is involved. Even if your state doesn't require one, you may want to hire a lawyer to help review contracts and make you aware of special considerations.

24. DO I REALLY NEED HOMEOWNER'S INSURANCE? Yes. A paid homeowner's insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give you tips on how to keep insurance premiums low.

25. WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER'S INSURANCE COSTS? Be sure to shop around among several insurance companies. Also, consider the cost of insurance when you look at homes. Newer homes and homes constructed with materials like brick tend to have lower premiums. Think about avoiding areas prone to natural disasters like flooding. Choose a home with a fire hydrant or a fire department nearby.

26. IS THE HOME LOCATED IN A FLOOD PLAIN? Your real estate agent or lender can help you answer this question. If you live in a flood plain, the lender will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home. Work with an insurance agent to construct a policy that fits your needs.

27. WHAT OTHER ISSUES SHOULD I CONSIDER BEFORE I BUY MY HOME? Always check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.

28. HOW DO I MAKE AN OFFER? Your real estate agent will assist you in making an offer, which will include the following information: § Complete legal description of the property § Amount of earnest money § Down payment and financing details § Proposed move-in date § Price you are offering § Proposed closing date § Length of time the offer is valid § Details of the deal Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer. Other ways to lower insurance costs include insuring your home and car(s) with the same company, increasing home security, and seeking group coverage through alumni or business associations. Insurance costs are always lowered by raising your deductibles, but this exposes you to a higher out-of-pocket cost if you have to file a claim.

29. HOW DO I DETERMINE THE INITIAL OFFER? Unless you have a buyer's agent, remember that the agent works for the seller. Make a point of asking him or her to keep your discussions and information confidential. Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve several factors: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

30. WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET ASIDE? Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount.

31. WHAT ARE "HOME WARRANTIES", AND SHOULD I CONSIDER THEM? Home warranties offer you protection for a specific period of time (e.g., one year) against potentially costly problems, like unexpected repairs on appliances or home systems, which are not covered by homeowner's insurance. Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home; a time when many people find themselves cash-strapped.

U.S. Department of Housing and Urban Development 451 7th Street S.W., Washington, DC 20410
1. HOW DO I KNOW IF I'M READY TO BUY A HOME? You can find out by asking yourself some questions: § Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable? § Do I have a good record of paying my bills? § Do I have few or no outstanding long-term debts, like car payments? § Do I have money saved for a down payment? § Do I have the ability to pay a mortgage plus additional costs every month? If you answer to these questions is "yes", you are probably ready to buy your own home.

Advantages of Setting an Acceptance Deadline

Wednesday, November 21, 2007

by Michael Peron

Placing time constraints on your offer is an often overlooked strategy. By limiting the time sellers have to consider your offer, you avoid an extended procrastination period that may cause an otherwise attractive deal to fall through.

Human Nature

People are motivated by deadlines. Sales, coupons, college applications, school papers all have deadlines. Deadlines create a sense of urgency and help us to overcome the complacency and procrastination we often feel with a big project. This same philosophy is true when negotiating to buy a house. A deadline will motivate the seller to review your offer in a timely manner.

Selling a home can cause anxiety and procrastination. For most people, home ownership is one of the largest financial transactions of their lifetime. Something of such magnitude is bound to cause some indecision. This is especially expected if the reason for selling is due to financial set-backs, health reasons or a change in life circumstances such as divorce. Their procrastination may have nothing to do with the specifics of your offer. A deadline will limit the time they have to get sidetracked by such emotions. You are forcing them to take action or risk losing a potential buyer.

Setting a Deadline

How much time do you give the seller to consider your offer? Be reasonable but be firm. Typically, more than one person is involved in the decision-making, and it may take time to coordinate everyone. In many cases, giving them until midnight the day the offer is presented is reasonable.

Occasionally, the seller may be particularly hard to reach, such as in the case of a vacation or business trip. In such a circumstance 24 hours is reasonable. In today's world of instantaneous communication, there should be no logical reason why it should take them longer than a day to decide. If they are serious, they will make themselves available.

Don't be concerned that a strict deadline will cause the seller to reject your offer. You are simply motivating them to give it timely consideration. If they do reject it, it will at least save you spending any more time on this property.

Remain Firm

Don't be pressured by your agent into granting more time. Some agents fear it will offend the seller and increase the chance of rejection. Some may also not be confident with their negotiating skills and are uncomfortable imposing such pressure on a seller.

Don't underestimate this strategy. The more time the seller spends contemplating your offer, the greater the chance a better deal may come along. A strict deadline minimizes the possibility of opposing bids.

Conclusion

You are committing yourself by extending the offer. Why should the seller not be expected to commit as well? A deadline will apply the pressure to help you get the deal you want.

Fort Lauderdale Real Estate Adds Another 5,000 Condo's Things That Make You Go Hmmm?

Tuesday, November 20, 2007

by Michael Peron

Downtown Fort Lauderdale is in the midst of another condominium boom which will add more than 5,000 residential units to the area.Here are most of the major projects being planned or already under construction. http://www.sun-sentinel.com/classified/realestate/community/sfl-edge-n-downtown,0,5446977.flash?coll=sofla_classified_realestate_xpromo

This "Venice of America" once was the mecca for beachfront thrills. By 1953, about 15,000 students were coming to the area during Spring Break. Just a year later, that number grew to 20,000. And the city was glorified in 1960 with the film Where the Boys Are. The sister of current Mayor Jim Naugle was an extra in that movie. By 1985, Spring Break attracted 350,000 students.

But then, officials decided the city needed a change. More of an upscale and improved image with economic strength and cultural vitality was sought. After all, city leaders reasoned, Fort Lauderdale is home to 155,181 residents, Broward's largest city and the seat of county government.

Downtown and waterfront real estate projects

Many Fort Lauderdale real estate projects around the beach and Intracoastal Waterway are planned, under way or just completed. Those developments are adding more than 1,900 condo units, hotel rooms, time-shares and apartments, more than 190,000 square feet of shops, offices and restaurants and tens of millions of dollars to the tax rolls.

Downtown Fort Lauderdale has become a hotbed of hip, upscale high-rise and town home construction. Trendy Las Olas Boulevard, with numerous outdoor dining spots added in recent years, boasts of being a prime dining and shopping district. The Las Olas Riverfront entertainment complex on the New River opened in 1998, drawing more people downtown.

Fort Lauderdale neighborhoods

Besides economic redevelopment, the city is concentrating on its neighborhoods and parks. Residents are getting new parks and improvements to existing ones through a voter-approved $35 million bond issue. And aggressive code enforcement is intended to clean up neighborhoods.

Many older neighborhoods have experienced rapidly rising property values in recent years. With western Broward reaching build-out, older eastern neighborhoods built in the 1950s and 60s are undergoing an influx of new residents.

Fort Lauderdale history

The Fort Lauderdale Historical Society says Seminole Indians first appeared in the area in the 1820s. In 1893, Frank Stranahan arrived and built a first trading post in what is now downtown Fort Lauderdale. The Stranahan House, Fort Lauderdale's oldest, now sits in the shadow of luxury highrise condos, just steps from the shops and restaurants of Las Olas Boulevard.

Fort Lauderdale's real estate boom in the 20s brought many setlers to what was mostly an agricultural community. Hurricanes and the depression caused growth to slow. The post-World War II economy made Fort Lauderdale real estate become attractive again, and steady growth has continued through the decades.

Short Sale Tip The Art of Negotiation

Thursday, November 15, 2007

by Michael Peron

Proficient negotiation is a skill that must be developed and learned and is integral to the success of any sales business.

There are complete educational programs taught by many institutions and many corporate training groups. Negotiation as an art goes back just about to the beginning of mans ability to engage in commerce.

Once there was a product that someone produced, that someone else wanted, there was some form of negotiation involved for its acquisition.

However, in real estate, the entire process seems to have been lost. Most real estate agents have not developed the skill of negotiation. In a recent book by titled "Real Estate Principles" By Charles F. Floyd and Marcus T. Allen it is written that the NAR sought to "ease" the burden of an agent learning how to negotiate by providing fill-in the blanks, boiler-plate forms and documents.

What is most paradoxical is that many real estate agents will tell prospective clients that real estate negotiating is the most difficult part and one should utilize an agent because they are experts. Most agents have no idea when it comes to really knowing how to negotiate. This is not a character flaw...it's just not taught to them.

According to psychologist Abraham Maslow's Hierarchy of Needs, the highest need of individuals is self-actualization.

"Understanding motivation is the key to a successful negotiation. Agents who understand this can navigate their way through a decision-making process even before the negotiation gets underway.

Self-actualization, or the need for one to reach their greatest potential, is Maslow’s highest need."

Sun Tzu, in the Art of War said, "to see victory only when it is within your view is not virtuous". In his many teachings he also stated.." Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

The Art of War has become a very important business book. It has been found that the principles that Sun Tzu spoke of in the 2nd century BC are very applicable in business today.

What does this mean in regards to Short Sales.

1. This is not a transaction to be taken lightly. If you are not aware and understanding of the motivation of ALL parties to the transaction then you are not prepared to negotiate.

2. Boiler-plate documents and cookie-cutter discussions as utilized in conventional real estate transactions is not conducive to a successful short sale transaction.

3. Negotiation is not a counter-offer. Negotiation is not sending an offer to the bank to "see if they will accept it". Negotiation is a planned, defined attack. I use that strong of a word to make sure you know you are in a battle. If you are not prepared to battle you will lose.

4. The basis of negotiation is that you have something at stake! Other than a commission that can be reduced, most agents do not have anything at stake and therein lies the biggest problem. If you are not IN the battle...but rather watching the battle...you really do not have anything to lose...or win.

Why would I want you negotiating my short sale? How are you posturing as an expert? And most importantly how are you helping the homeowner in foreclosure if you have no idea how to negotiate.

We see it everyday. The homeowners call us and tell us the horror stories. We put offers into agents who have foreclosure listings and time and time again, we run into the same old story. The agent does not understand and in turn can not negotiate what they do not understand.

Short Sales are not child's play. You can not go to a free 2 hour seminar and even remotely expect to understand all of the nuances, pitfalls and strategies necessary to maximize profit on a short sale. But...maybe therein lies the problem.

Getting Started Tips For Homebuyers

Tuesday, November 13, 2007

by Michael Peron

1. HOW DO I KNOW IF I'M READY TO BUY A HOME? You can find out by asking yourself some questions: § Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable? § Do I have a good record of paying my bills? § Do I have few or no outstanding long-term debts, like car payments? § Do I have money saved for a down payment? § Do I have the ability to pay a mortgage plus additional costs every month? If you answer to these questions is "yes", you are probably ready to buy your own home.

2. HOW DO I BEGIN THE PROCESS OF BUYING A HOME? Start by thinking about your situation. Why do you want to buy a home? How much can you afford in a monthly mortgage payment (see Question 4 for help)? How much space do you need? What areas of the town do you like? After you answer these questions, make a "To Do" list and start doing casual research. Talk to friends and family, drive through neighborhoods, search for new listings on search engines (Yahoo and Google), and look in the "Homes" or "Real Estate" section of the newspaper.

3. HOW DOES PURCHASING A HOME COMPARE WITH RENTING? The two don't really compare at all. One advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity; take advantage of tax benefits; and protect yourself against rent increases. Also, you may not be free to decorate or remodel without permission and may be at the mercy of the landlord. Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that's an investment! Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities: like insurance, real estate taxes and upkeep, which can be substantial. But given the freedom, stability, and security of owning your own home, the new responsibilities are worth it.

4. HOW DOES THE LENDER DECIDE THE MAXIMUM LOAN AMOUNT THAT YOU CAN AFFORD? The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should total no more than 41% of income. When determining your maximum loan amount, the lender also considers cash available for down payment and closing costs, credit history etc.

5. HOW CAN I DETERMINE MY HOUSING NEEDS BEFORE I BEGIN THE SEARCH? Your home should fit the way you live: with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities: things like location and size. Should the house be close to local schools, your job, or public transportation? How large should the house be? What type of lot do you prefer? What kinds of amenities are you looking for? Establish a set of "minimum requirements" and a 'wish list." "Minimum requirements" are things that a house must have for you to consider it, while a "wish list" covers things that you'd like to have but aren't essential.

FINDING YOUR HOME

6. WHAT SHOULD I LOOK FOR WHEN DECIDING ON A COMMUNITY? Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people who live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable.

7. WHAT SHOULD I DO IF I'M FEELING EXCLUDED FROM CERTAIN NEIGHBORHOODS? Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD's Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777 (and 1-800-927-9275 for the hearing impaired).

8. HOW CAN I FIND OUT ABOUT LOCAL SCHOOLS? You can get information about the school system by contacting the city or county school board or the local schools. Your real estate agent may also be knowledgeable about schools in the area.

9.HOW CAN I FIND OUT ABOUT COMMUNITY RESOURCES? Contact the local chamber of commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information. You may also want to visit the local library. It can be an excellent source for information on local events and resources, and the librarians will probably be able to answer many of the questions you have. The web can be a good resource for community information. Ask your agent to send you a list of community resources on the web.

10. HOW CAN I FIND OUT HOW MUCH HOMES ARE SELLING FOR IN CERTAIN COMMUNITIES AND NEIGHBORHOODS? Your real estate agent can give you a ballpark figure by showing you comparable listings. If you are working with a REALTOR, they may have access to comparable sales maintained on a database.

11. HOW CAN I FIND INFORMATION ON THE TAX LIABILITY FOR A PROPERTY? The total amount of the previous year's property taxes is usually included in the listing information. If it's not, ask the seller for a tax receipt or contact the local assessor's office. Tax rates can change from year to year, so these figures may be approximate.

12. WHAT OTHER TAX ISSUES SHOULD I TAKE INTO CONSIDERATION? Keep in mind that your mortgage interest and real estate taxes will be deductible. A qualified real estate professional can give you more details on other tax benefits and liabilities.

13. WILL AN OLDER HOME PROVIDE BETTER VALUE THAN A NEW ONE? There isn't a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer better ambiance and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry about upkeep and repairs for the first few years.

14. WHAT SHOULD I LOOK FOR WHEN WALKING THROUGH A HOME? In addition to comparing the home to your minimum requirement list and wish list, use the HUD Home Scorecard and consider the following: Is there enough room for both the present and the future? § Are there sufficient bedrooms and bathrooms? § Is the house structurally sound? § Do the mechanical systems and appliances work? § Is the yard big enough? § Do you like the floor plan? § Will your furniture fit in the space? Is there enough storage space? (Bring a tape measure to better answer these questions.) § Does anything need to repaired or replaced? Will the seller repair or replace the items? § Imagine the house in good weather and bad and also in each season. Will you be happy with it all year round? Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.

15. WHAT QUESTIONS SHOULD I ASK WHEN I START LOOKING AT HOMES? Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure that the answers you get from the seller or real estate agent are clear and complete. Ask questions till you understand all the information that they have given you. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list.

16. HOW CAN I KEEP TRACK OF ALL THE HOMES I SEE? If possible, take photographs of each house: the outside, the major rooms, the yard, and extra features that you like or ones you see as potential problems. And don't hesitate to return for a second look. Use the HUD Home Scorecard to organize your photos and notes for each house.

17. HOW MANY HOMES SHOULD I CONSIDER BEFORE CHOOSING ONE? There isn't a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, homebuyers see 15 houses before choosing one. Just be sure to communicate often with your real estate agent about everything you're looking for. It will help avoid wasting your time.

YOU'VE FOUND IT

18. WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME? An inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware only of repairs that are needed. The Inspector does not evaluate whether or not you're getting good value for your money. Generally, an inspector checks (and gives prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector who is qualified and experienced. It's a good idea to have an inspection before you sign a written offer, because, once the deal is closed, you've bought the house "as is". Or, you may want to include an inspection clause in the offer when negotiating for a home. An inspection clause gives you an "out" on buying the house if serious problems are found, or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

19. DO I NEED TO BE THERE FOR THE INSPECTION? It's not required, but it's a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd like to purchase and it is a good time to ask general maintenance questions.

20. ARE ANY OTHER TYPES OF INSPECTIONS REQUIRED? If your home inspector discovers a serious problem a more specific inspection may be recommended. It's a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas, asbestos, or possible problems with the water or waste disposal system.

21. HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOUSE? If the house you're considering was built before 1978, and you have children under the age of seven, you will want to have an inspection for lead-based paint. It's important to know that lead flakes from paint can be present in both the house and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

22. ARE POWER LINES A HEALTH HAZARD? There are no definitive research findings, which indicate that exposure to power lines can result in greater instances of disease or illness.

23. DO I NEED A LAWYER TO BUY A HOME? Laws vary by state. Some states require a lawyer to assist in several aspects of the home buying process, while other states do not, as long as a qualified real estate professional is involved. Even if your state doesn't require one, you may want to hire a lawyer to help review contracts and make you aware of special considerations.

24. DO I REALLY NEED HOMEOWNER'S INSURANCE? Yes. A paid homeowner's insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give you tips on how to keep insurance premiums low. 25. WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER'S INSURANCE COSTS? Be sure to shop around among several insurance companies. Also, consider the cost of insurance when you look at homes. Newer homes and homes constructed with materials like brick tend to have lower premiums. Think about avoiding areas prone to natural disasters like flooding. Choose a home with a fire hydrant or a fire department nearby.

26. IS THE HOME LOCATED IN A FLOOD PLAIN? Your real estate agent or lender can help you answer this question. If you live in a flood plain, the lender will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home. Work with an insurance agent to construct a policy that fits your needs.

27. WHAT OTHER ISSUES SHOULD I CONSIDER BEFORE I BUY MY HOME? Always check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.

28. HOW DO I MAKE AN OFFER? Your real estate agent will assist you in making an offer, which will include the following information: § Complete legal description of the property § Amount of earnest money § Down payment and financing details § Proposed move-in date § Price you are offering § Proposed closing date § Length of time the offer is valid § Details of the deal Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer. Other ways to lower insurance costs include insuring your home and car(s) with the same company, increasing home security, and seeking group coverage through alumni or business associations. Insurance costs are always lowered by raising your deductibles, but this exposes you to a higher out-of-pocket cost if you have to file a claim.

29. HOW DO I DETERMINE THE INITIAL OFFER? Unless you have a buyer's agent, remember that the agent works for the seller. Make a point of asking him or her to keep your discussions and information confidential. Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve several factors: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

30. WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET ASIDE? Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount.

31. WHAT ARE "HOME WARRANTIES", AND SHOULD I CONSIDER THEM? Home warranties offer you protection for a specific period of time (e.g., one year) against potentially costly problems, like unexpected repairs on appliances or home systems, which are not covered by homeowner's insurance. Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home; a time when many people find themselves cash-strapped.

U.S. Department of Housing and Urban Development 451 7th Street S.W., Washington, DC 20410 Telephone: (202) 708-1112 TTY: (202) 708-1455

INSPIRATION FOR TODAY

Monday, November 12, 2007

by Michael Peron

"I don't know the key to success, but the key to failure is trying to please everybody."

~ Bill Cosby

WHO'S GRADING YOUR EXAM?

Ah, the concepts of failure and success. Our perspective on each has an effect on nearly every aspect of our lives - work, play, and relationships. How do we define our failures and our successes, or our potential for each? If you're taking a multiple-choice exam, then the answer is pretty easy - it's how many correct answers you mark versus how many incorrect answers. The more you mark correctly, the more successful you are on the exam.

Although life too can be seen as a series of "multiple choice" problems, there is not necessarily an instructor giving us the answers from which to choose, or who can "grade" our performance once we've decided. No, it is really up to us as individuals to evaluate our choices and our actions. Yet so many of us look to others to measure our success.

Who's the top producer in your office? Who has the most base hits on your league's softball team? You’ve got to be careful not to define success by a single aspect of one's performance. Every person is an individual, who needs to decide for himself or herself how to define his or her success. If you're simply measuring yourself against everyone else, or what you believe everyone else expects of you, you may be cheating yourself out of true happiness.

Don't try to please everyone, because it simply cannot be done. But pleasing yourself is easy when you do the best job you can do - at work, at the gym, at home - and know in your heart that you've succeeded according to the goals you've established for yourself. Don't let anyone tell you that you're a failure because you haven't "measured up" against someone else or their definition of success.

You're a winner every day that you believe you're a winner. Start telling yourself today that you are a success, that you will be a success, and follow your ambition as far as it will lead you - that's all there is to it!