Politics and Real Estate Don’t Mix

I know, I know. I am not going to follow protocol here at all and I’m going to give a political opinion. Sorry if anyone is offended, but this is the way I see it.

First of all, I see all of the Obama supporters slamming Hillary Clinton and more recently, Bill Clinton. I’m reading an America Online poll that says 68% of the people think Bill Clinton is hurtful to his wife’s campaign. I say WOW! As far as I remember, all of the Democrats of the world hung their hat on Bill Clinton. Everyone said he was one of the BEST Presidents of all time (and I strongly disagree).

If Clinton was not a good President, when was the last time there was a Democrat in the White House who was a great (or good for that mater) Commander in Chief? Let’s see….. Jimmy Carter? Johnson? JFK? Hardly a trio I’d be proud of. To say JFK was the worst President of all time, well I can make an EXCELLENT argument on that one and had he not been assassinated, history would agree with me. Bay of Pigs, the Cuban Missile Crisis (almost WW III over Kennedy ego) just to name the two biggies. As a matter of fact, take the Monica Lewinski crisis and Jimmy Carter’s “lusting after other women” and JFK’s legendary womanizing and what have the Democrats offered over the years……. except using the White House as a personal “chick magnet” at America’s expense.

In my lifetime we have had Richard Nixon (say what you will, but he got us out of Vietnam a war that JFK got us into), we have Ronald Regan, we have Bush the senior and we have “W”. Now what I see is since the Democrats took over in November 4 years ago (Senate), look where we have gone! Look at W’s first term when the Republican’s controlled EVERYTHING. Our country has a history of electing a Democrat, then a Republican to fix everything they screw up.

“W” did not ask to be a war time President. 911 changed that. Real estate, even with the bubble breaking, is still worth 40% to 50% more than when Clinton left office. HISTORY will say he was one of our better Commanders.

Now the Obama group is telling us that this wet behind the ears FRESHMAN SENATOR is ready to lead the nation?Are you kidding me? The Democrats could not come up with a better choice? ANY one of the top 5 Republican’s that were in the race topple the Democrat’s Clinton or Obama.

Since I am Hispanic and a minority myself, I feel like I can say that if Obama where a white man, he would have never gotten out of the starting gate. Look at his experience or lack thereof! For heaven sake, Hillary is a FRESHMAN SENATOR as well (she was married to a President, but I’m not going to vote for Nancy Regan for President). I hope to see a black man, a woman or a Hispanic as President one day. The RIGHT choice at the RIGHT time. Not because he or she is cool (I can’t argue that Obama comes across as the “cool dude” for younger Americans just like that “cool dude” peanut farmer that was elected in 1976). What did Jimmy do? ZILCH in my opinion.

Condoleezza Rice? Elizabeth Dole? HELL YES! With 100% certainty, they will get my vote if and when they ever run for President. Elizabeth Dole, maybe her time has passed. Ms. Rice has the EXPERIENCE to get the job done. A black woman as President? That (Condoleezza Rice) is a GREAT idea that I will embrace. An inexperienced freshman Senator? I’ll take a pass.

Senator Mc Cain is one of the most experienced representatives on the planet. He knows the system. Obama’s “fairytale” of change will never happen. He has not EARNED the respect of the ones who count (not all of those college kids who have yet to do anything on their own). Mc Cain will keep the “W” tax cuts. Obama (or Clinton) for that matter, will raise taxes and further damage our slowing economy. As the old Republican saying goes, “Vote Republican, for a change” in November. We all saw what happened four years ago when the liberal congress and Senate blocked the President at every turn. Do we need more of that type of “change” I ask?

A vote for Mc Cain is a vote for real estate and a vote for TRUE change. I’m going with EXPERIENCE, not coolness. And by the way, if Obama is so smart, why does he smoke cigarettes? Has anyone told him that cigarettes cause cancer? What intelligent person would make that choice? Can you imagine Air Force One and The White House? The smell of cigarette funk everywhere?

Common sense says Mc Cain. This is not a race about “race” or about young verses old. It’s about what is best for the USA in the most critical election of my lifetime. I’m going with EXPERIENCE!

No “Friends” In Real Estate?

No friends in real estate? Consider yourself lucky! One thing I have learned over the years (I read this in a book recently) is that all things being equal, a person will do business with the person they know, a friend. All things NOT being equal, people will STILL do business with the friend over a more qualified person in the same field.

I wonder if the same could be said about doctors? You need triple bypass surgery and your golf buddy just graduated medical school. Would you let him do the surgery? How about this: You are wrongly accused of murder and the guy who works with your wife just passed the Bar and is a “part time” attorney. Do you hire him to defend you?

Why in the world do people do this in real estate? Next to death and divorce, the experts say that buying or selling a property is the most stressful thing a person can do in life. In 75% of the cases, the homesteaded property is that persons largest asset. When buying or selling, I OFTEN see the Agent that represents those clients is a “friend” of the family.

I know that in 2005, some of those “friends” not only led their clients to the water, they forced them to drink all the Koolaid! Fast forward to 2008. My “part time job” is being a janitor, cleaning up all the Koolaid that got thrown up! I saw million dollar deals handled by the most inexperienced agents in Tampa that knew nothing about the ins and outs of this price point or any price point for that matter.  Thus the term SHORT SALE was born! Who knew what that was three years ago? Now it is ingrained into our vocabulary!

The State and County appreciate it because they are reaping huge tax dollars from unnecessary tax bases that legally, should have been adjusted but were not. Sometimes, the Buyer is overpaying by hundreds of thousands of dollars as well.

The bottom line is this: If you are going to play the game of real estate, make 100% you are playing with a winner! All of those agents that were soooo cocky in 2005 and 2006 are long gone. Who can you call to clean up this mess? This mess that was crated by those “friends” in the business who never thought the bubble would bust……… because they never knew anything but a bubble!

Back to the reality of the fact that the same Agents cleaning up this mess are not the ones who made it. The ones who made it, cut a fast buck and are on to the next quick dollar (remember those “Day Traders” a few years ago?). The true professionals will pick up the pieces……. like we always do. Those new to an area: If you don’t have a friend in the real estate business, consider yourself lucky. You get to work with an agent that actually has the credentials to the job for you and to do it RIGHT…..if you do your homework before you hire an agent.

A final note: When I was a new Realtor in 1991, my Broker, the late Juanita Dennis, required new agents to work with a mentor for six months or for the first ten deals of their career. Then, for the next 10 deals, the Broker or manager of the office had to review offers and listings before they were submitted to the office or to a client. After that, they kept a very close eye on your deals until they were satisfied you could do the job! Today, you get your licence (not in all, but many offices) and you get your experience practicing on live, unsuspecting clients. THIS IS JUST WRONG. Welcome to the world of the TRANSACTION BROKER! No liability to the Broker equals a “who cares if the client gets burned” attitude. Why should they worry? There is no longer a hook at the end of the fishing pole!

Captain Credit

I have said this again and again in past Blogs, but I am making this the focal point of this write because it is the truest thing you will ever read on the Internet. EVERYONE with a heartbeat and a brain knows what caused this real estate mess we are in………. EASY CREDIT or “lose credit” as we call it in our office. Without reliving the past, we all know that anyone with a pulse got a loan in 2004 and 2005. In 2006, they tightened the criteria to anyone with a pulse and who was conscious. In 2007 however, everybody got a taste of old school America. You actually had to have some skin in the game. You needed a down payment!

A mandatory down payment requirement in 2004 would have been great protection from this disaster. Even with loose credit, if the Buyer had say 5% or 10% of their own money (or mommy and daddy’s money), they would not be so quick to abandon ship. Like I said, EASY MONEY got us into this mess and EASY CREDIT can get us out! If the Fed’s would loosen up the funds to loan and require down payments, especially with the market being close to the bottom, banks have added protection from the market. Buyer puts 10% down, lender has a 10% cushion. They put 0% down and you have the 2008 real estate market.

The mistake was not EASY CREDIT, the mistake was the zero down payment AND easy money! This combination was a disaster waiting to happen. Take one away from the other and you have a stronger loan, a stronger buyer, creating less inventory and a recovering real estate market…………. and a recovering US economy! In Florida, we already have made property tax adjustments, we have another on the ballot in November to raise the sales tax .01 and replace the school portion of property taxes. The insurance industry has allowed homeowners to drop “sinkhole” coverage under certain conditions (and since the odds are slim you will get one and it is VERY expensive) bringing down insurance costs down to manageable levels again. New construction is at a 25 year low. The climate is perfect for a real estate recovery!  The money needs to be readily available to buyers with down payments and there will be some takers for all of this stagnant inventory. As the inventory dissipates, prices will stabilize, then rise. As it stands today, there are not enough credit worthy buyers, under the current system, to even touch the amount of available inventory in or on the market. It’s called supply and demand (retail 101). In 2004 and 2005, there was SO MUCH credit available that it created a supply shortage  …….. thus the skyrocketing of real estate prices! Take away the credit……………..CRASH!

It’s all about the money availability! America was built on borrowing money. That will not change overnight. As long as real estate remains flat, so will our economy. As soon as real estate makes a recovery so will the US economy………….faster than you can say “what recession?”

July 2008, the Realty world Changes for the worse!

In July of 2008, in the great state of Florida, it will no longer be required of agents to disclose a Transactional relationship with Buyers or Sellers! How did this happen? This could be the greatest boner ever passed! Great job NAR for not taking a harder look at this one.

To the general lay person, it may not seem like a big deal, but let me put this thing into perspective for you: For the sake of this Blog, lets assume you are the seller of a $400,000 house. You list with XYZ Agent who does not disclose that they are acting as a Transaction Broker. You hire them. Two months later, you have another agent from ABC Realty offer $350,000. This Agent from ABC Realty is speaking with the Buyer and tells the Buyer agent (YES, the one that is representing the BUYER, trying to get the best deal they can for their BUYER) that they “will pay full price for the house”, but they want to see if the seller will move off that price. YOUR AGENT THAT YOU HIRED TO SELL YOUR HOME (the Transaction Broker) overhears this conversation. Your Agent gives you the offer. You review it and decide to counter offer $375,000. Your Transaction Broker will watch you sign the contract, knowing that you are leaving $25,000 on the table, and proceed with the sale. Who had your back? You just paid a $21,000 commission to one Agent from XYZ ($10,500) who basically “facilitated the deal” and $10,500 to the Buyers Agent, who did a VERY NICE job representing their Buyer.

Had the Seller listed with a “Single Agent” or an Agent that represented the SELLER, they would be $25,000 ahead of the game. To the common lay person, this is difficult enough to understand, as of July 2008, the Seller has NO CHANCE TO SEE THIS because Agents will no longer be required to disclose this type of representation.

If you think you are safe with larger firms, think again. Some of the most well known names in real estate NO LONGER REPRESENT SELLERS. Ignorant Sellers don’t ask questions and they just assume that they are being represented. Those agents when asked will SPIN, SPIN, SPIN this fact. But there is no hiding the FACT that Sellers, the ones who pay the Realtors, are getting short changed, or should I say, “short dollared” by this misleading change.

Now, more than ever, you need to ask of your Realtor FLAT OUT, “Do you represent me, YES or NO” and take the spin off thank you very much! I don’t know the exact number, but I’m willing to bet that over 75% of the Sellers that have their home or property listed in Florida now are operating under this “Transaction Broker” scenario. The laws need to be changed so that Buyers and Sellers are again working at arms length! As it stands now, Buyers are being represented most of the time, yet Sellers are not. Why? Because they are not asking for the representation!

This is simply put, a way to put a buffer between the Listing Office / Agent and the Seller, in case of a lawsuit later. The Listing Agent can “divorce” the Seller and say “I was a Transaction Broker” thus erasing potential liability!

That’s the way I see it!

Kicking Sand in Faces

O.K, I’m an equal opportunity offender so here I go.

One thing that always gets under my skin since I began selling real estate, or “sell’in that dirt” as local real estate legend Jeff Curtis once said to me, is the designation status Agents bestow on themself. ABR, CRS, CRB, DREI, GRI, CIPS,TRC, TMP to name a few. What does it all translate into? I can’t figure out what those agents do. I bet they spend ½ their life shuffling papers back and fourth between instructors in class.

I can’t find the time to go to lunch, let alone take a class so I can get some sort of designation. I remember being a new agent in 1991. I met an agent in my office and her card said “Million Dollar Club” and remember thinking “WOW, she is a millionaire”. Being a new agent or “rookie” things like that seemed important. This was until I found out that the “Million Dollar Club” in real estate is an agent that has sold a million dollars worth of real estate in one year. This translates into a $30,000 income. Now I figure, back then, 50% went to the Broker you worked for. Translation: That “Million Dollar Club” agent made $15,000 a year. I’m no historian, but even in 1991, I’m reasonably certain $15,000 put you in poverty level of income.

The best Realtors I know are a mixed breed. Some of them have a few designations, some have none. I have  not found that Agents with designations are better Realtors than those without. It varies from person to person. I was ranked #4 in the world by ERA in 2007, #1 in Florida (for ERA) and I have been the #1 ERA Agent in Tampa Bay since 1995. I have ZERO designations. I let my work (sales) speak for itself. As I have mentioned in previous Blogs, real estate is the single most pretentious business I have ever seen. Many Agents try and give the perception of success, but in truth, some can’t close a door, let alone a real estate deal.

One of the most comical things I see is this scenario that we see over and over:

Here is an agent, walks into a listing (house for sale) and starts to criticize the house openly in front of the Buyer. One negative comment after the other. Many times, I know that the Buyer likes the house, but the Agent shamed them into not making an offer. They repeat this mistake, house after house. Then, they wonder why that buyer never purchased from them. They say “Buyer are liars” and badmouth the client. The reason they did not buy is because Mr. Know It All did not know how to sell. Part of selling is knowing when NOT to talk. Selling real estate is not rocket science! You show the house, point out the positive aspects, keep your mouth shut on the negatives unless the Buyer openly does not like the home.

I’m not talking about structural flaws or a flaw that needs to be disclosed by law. I’m talking “Mr. Know It All IGNORANCE”. What sets Agents apart is there ability to work hard and get the job done. Even in my office, ½ the Agents are at home, watching Opra Winfrey re-runs and wondering why they are nat selling anything.

I demand hard work and I lead by example. I have no room on my Team or my staff for any half assed agents who refuse to take real estate seriously, and I’m not talking being in a class all day trying to learn how to “stage” a home so I can get another designation next to my name. I’m talking WORKING real estate like the JOB it is.

NEVER judge an agent by how many designations are next to that persons name.

Try driving by the office and see how often that person is there. How hard are they to get hold of. How serious are they about their job. This alone will tell you how serious they are about selling your home or finding you a home. Designations don’t get you a better interest rate. Selling thousands of homes over the years and commanding the respect of lenders who want to EARN your business. They will give your clients THE BEST deals because they want repeat business from the Agents. Not because they are an ABC or a GTP, but because of MONEY. They want the repeat referral business that we all thrive on. That is how you can get the BEST price when selling, the BEST price when buying, the BEST insurance rates and the BEST interest rates. Success breeds success. I’ve spent my career learning from other top agents. Those are the education gridlines I followed to get me where I am today. Some of my mentors had plenty of designations, but I’d be telling a lie if I did not state the fact that MOST of the lessons I have learned have been from successful agents without letters next to their name.

What I am about to say is 100% FACT: I KNOW of a “Real Estate Coach” for a well known National Trainer. Some victims (Realtors) from across the country call him. He is their “Coach” or mentor in the business. Thease Agents are paying $1,000 per month for this “Coach” to lead them. The National Trainer gets $500 and his coaches get $500. Know what the “Coach” does? Well, a year ago, he was delivering pizza. He got into real estate, had some success, became a coach for this trainer. Then, he got caught up in the real estate bust and is no longer a Realtor. But he is still a coach, collecting that $500 per month. Can you imagine the Agent paying $1,000 for advise from somebody who left the business and is no longer selling real estate?

When we say the “game of real estate” sometimes we really mean THE GAME OF REAL ESTATE! As I say over and over…… ask questions. Know the right questions to ask! If you don’t know what to ask, go to www.sellwithvince.com and take a look at my videos that are applicable to your situation.

Now I’ll brace myself for all of the complaint e-mails I’m going to receive.

 

A Stay of Execution?

Something happened on the way to “Old Sparky” this week! The Florida real estate market got a stay of execution! For the first time in 2008, real estate prices did not fall from one month to the next! Could this be the slowdown we have been waiting for since 2006? In Tampa Bay, prices inched up almost 1% from March to April. This could be a slowdown in the meltdown! Don’t be so quick to shoot this number down! From March to April 2007, sales went DOWN. This same time period in 2008, the number of homes sold was up almost 17% (but still below 2007 numbers).

 

This is good news and shows the decline is flattening out…… maybe! Once we hit the bottom of the curve, most economists predict a “V” spike to the higher profile areas of Florida. I think we still have a way to go to reach the day to day stability that most Realtors, including myself, like, but this is a sign that we could be closer to that day than previously thought!

With absorption rates still at around 6% (up 2% from January), Buyers and Sellers are still far apart. Lenders need to loosen up their grip on the money, Sellers need to be more reasonable, banks need to make proper adjustments on short sales and MOVE INVENTORY and Buyers need to get some “skin” into the game (as in down payments). But if this big greedy machine, also known as the Untied States of America gets rolling again, there could be some bright days ahead………. baby steps to start mind you, but moving forward!

Now, could somebody put me into a drug induced coma until we are completely out of the woods? (just kidding). Happy Buying and Selling!

And don’t forget to visit my web site at www.sellwithvince.com. And “hey, Florida, keep those property tax reductions coming and hey insurance companies…….. don’t talk trash about the oil companies. you are just as greedy! Can everyone work together here to keep Florida going? If we can’t work together (all of us), then would the last person leaving Florida turn out the lights?

So, You Want To Be A Realtor?

So you want to be a Realtor? It was a funny weekend for me. I listed a house two weeks ago and we have shown the property three times since then. The last couple I showed the home to decided to make a very nice offer. My seller decided that “it was too easy” for me and they did not want to pay me the fee they had originally agreed to less than fifteen days ago.

Many Sellers in this position feel the Agent they hired did not justify the fee they earned because it was “just too easy!”

Well, let me tell you about my last month in this wonderful; business that I truly, truly love and that is the passion of my life (next to God and my family).

 

 

At almost $4.00 a gallon, I have filled my cars tank 8 times this month (3100 miles) at a cost of about $600. Driving clients all around Tampa Bay, driving to check empty houses to make certain other agents did not leave lights on, doors unlocked etc. I closed on a home that was listed for over one year. I had to pay a contractor $300 out of pocket to make a last second “walk thru repair” because the closing was a mail away and the seller docs were already in Tampa. Do you think I will get a check in the mail from my Seller to pay me back? In almost 20 years in this business, I’d gamble on…………….ahhhhhhh……   NO!

I had a listing that I had asked the Seller to list at $480,000 six months ago, but they listed at $525,000. Now, six months later, they list with another agent at a price of $449,950. I had invested over $2500 in marketing on this home and that money will never be recuperated, it’s the cost of doing business.

I had another client that called, asked me to meet her at Capital Grill, one of Tampa’s best restaurants. She claimed to be in town to buy 4-5 houses. After driving across town to meet her (and buy her lunch), she obviously has a screw loose and was not for real. Another cross town trip for ZERO. The same week, I had a person list with me. I sent the photographer out to shoot the house, take the Virtual Tour, burn CD’s and make full color brochures. Then they decided to not sell in this market!Just a typical day in the world of real estate! It is a great business to be in. To make a living, you have better have some talent! For someone to say this is “too easy” to make money, I say saddle up and give it a try!

 

Tampa X 2

The future looks?……………………….. the media would make you think the sky is falling in on real estate! It’s just a thunderstorm! According to the Tampa Tribune yesterday, the population of Tampa is expected to DOUBLE in the next 30 years! Holly Cow! Builders better get to building! With only a 5% vacancy rate here in the Bay area, they are going to have to double the housing in less than 30 years (build another town the size of Tampa)!

Again, I caution all of those in a panic: Like the early 70’s like the Savings & Loan crisis of the late 80’s and early 90’s, this too shall pass.

A word of caution if you are a buyer in this market: Gauge the curve! In other words, give yourself some flex room! Try and buy below market if you can to offset the decline! I can’t see the market getting below 2004 values so to me, this is a good spot to be in if you can get there.

If you are not looking to sell just yet, this is a wonderful time to do some renovating and updating! You will enjoy the newness of your home for a few years before you sell! Better than adding those granite counters after you move out! Live a little! DON’T renovate your pool! I had one person ask me if they should renovate their pool (how much would it increase value) and in a word NO. You will get almost ZERO for that type of renovation (drastic pool renovations). Pavers yes, outdoor kitchen, yes, re-marcite, yes. Radical alterations, NOPE!

You will get about 80% from kitchen and bathroom renovations. Find a contractor who gives you a 20% discount and you will get 100%! PLUS the renovations will make your home easier to sell! Shop around. Lots of skilled contractors looking for work now that they are not building so many houses!

We are in a soft spot in the market! Now is the time to come up with your game plan for the new three years!

The Best Agents? Ask Questions!

One thing I can’t understand, is Sellers not doing homework when selecting an agent to list their home with. There are so many variables. For example, one of the largest real estate firms in the WORLD, does not represent the clients that hire them. They, at least in Florida, act as “Transaction Brokers.” This is a “spin” name in my opinion for “I’m not representing you Mr. & Mrs. Seller.” The BUYER can have a Buyers Agent, but you, the Seller have hired a neutral sales agent to represent, or should I say, facilitate, the sale of your home. Many agents still represent Sellers when listing, so do your homework. Processing fees: Why do some agents charge processing fees? Is that not why we get a commission? $295, $395 whatever. It is not a justifiable fee in my opinion. How about this: Does the agent own shares in a Title Company? Why is this relevant? Well, some agents “give you a discount”, say 1% off the commission. Shares in a title Company is a great way to recoup some of your money that they just discounted for you. They can jack up the Title Insurance, charge you a few more junk fees (in addition to that $295 processing fee they already clipped you for), they charge the other agent that sells your home inflated MLS Fees (the fees that offices customarily charge one another at closing) and the cha ching keeps racking up! Do yourself a favor, use a real Estate Attorney or reputable title Company that YOU select if the Agent has ownership or shares in the firm they recommend.

Another comical thing is Agent tooting their own horn (unless it’s true of course). We have an agent in Tampa that is in every real estate magazine you can find. “THE Luxury Home King” of Tampa. The funny thing is, they have tons of high end properties, so the luxury home SELLER takes the bait. The problem is, they are not selling anything, at least not the numbers they will make you believe they are. Heck, when you run into them at the watering hole, they are always quick to brag about how much they sell. Too bad Realtors can look up the ACTUAL numbers. Who are they fooling? More than themself! Those Sellers, who are now locked into a long, lengthy listing agreement with no way out! Should all listings be voidable? You bet your sweet donkey they should! What if you owned a car lot and a salesman could not sell cars? Can you fire them? It should be the same for Realtors!

Real estate, especially the state we are in today is not something Sellers or Buyers should take lightly. Take a good look at the agent you are considering. Many Realtors give the impression that they are highly successful, driving new luxury cars, new Rolex, nice jewelry. Now look HARDER! What does their spouse do for a living? Most agent living in those ultra expensive communities would be living in trailer parks if they had to rely on their real estate sales! Dr. Husband or Attorney wife? Make certain all of that fluff can be backed up with legitimate sales activity. Many agents are trying the “Short Sale” game. This is VERY COMPLEX business. They have never successfully completed one, yet they take the listing and “practice” on a person in dire straits? Success breeds success, sales breed sales. As an Agent myself, I know of several agents that I would list or buy through if I were not an Agent myself. They are out there, but they are in the MINORITY and it takes an educated Buyer or Seller to ask the right questions so they hire a capable agent that leaves ZERO of your money on the table at close. Hire the wrong agent in this market, chances are they will not be a closing!

The problem is that real estate is such a pretentious game. Everyone is trying so hard to “look the part” that they forgot to acquire the skills. The market is flat, before you hire an agent, do your homework, look at the FACTS and most important, ask questions, ask questions, ask questions. If the Agent spends 80% of their time telling you how successful they are and not WHAT they ARE going to do to sell your home, move on to the next interview!

Happy Selling!