MLS? Zillow? Trulia?

I ran across a blog post by Jay Thompson regarding a story in the Wall Street Journal about on-line home searches. He noted that in his area the WSJ had it wrong. He researched the numbers for the local MLS, Trulia and Zillow. His findings were that Zillow only showed about 10-31% of the listings shown on the MLS, and that Trulia only had between 69-90%.

So, I decided that I should take a look at a few zones in Gwinnett County.

• For 30087, I came up with 442 (FMLS), 457 (Zillow), and 482 (Trulia)

Hhmm… That seems odd. Reviewing 10 of the 33 pages of Trulia, I couldn’t find ANY FSBOs. How can they have more? Well, about 20% of the listings seem to have been sold or expired (and not relisted). I found a similar percentage on Zillow. This was based on a sampling. Furthermore, I found homes on FMLS that were not listed on either Trulia or Zillow. Trulia was a little more accurate.

• Next up, 30043. 842 (FMLS), 467 (Zillow), and 447 (Trulia)

But wait… there are still expired listings from agents, and homes that have already sold but not been updated in the system. I am finding some interesting listings, too. For example, there is a $7.9M property on Zillow (make me move…) that isn’t on the MLS.

• Finally, 30518… 576 (FMLS), 419 (Trulia), and 3673 (Zillow)

What? Ok, now I’m seeing something. Not one of the properties on the first page is in the MLS. Wow, they must have a lot of listings to peruse. Why would anyone use the MLS? Oh, wait… Several ARE in the MLS, just not in the ZIP code that I searched. All of the first page are listed in multiple ZIP codes on Zillow. So, how many houses are acually listed by Zillow in 30518? I don’t know, and I’m not going to wade through them to find out. But, if I were searching for a property in Buford, GA, I’d be a little annoyed that I had to wade through homes in Chamblee (15 miles and 45 minutes away), and Dallas (GA… but still over an hour away) to find houses that were actually in the area I was looking.

So, Lane, what do you think?

I think that Zillow sucks. I’ve done a previous post about their absolute lack of accuracy in their Zestimates in this area. Trulia is a much better choice here, but still not likely to give the latest up to date info, nor all of the options. FMLS is a better choice.

If you want to find a home in Gwinnett County, let me know. I can set you up on a search within FMLS that will go to a custom website… just for you. It’s called the Client Gateway.

Lane.Bailey on Yahoo IM

Or you can email me through my contact form at GarageHomesUSA (When I post my direct email, I get spammed. I apologize in advance for the extra step).

I look forward to hearing from you.

Is a clear sky blue?

Sitting down this morning getting my Fox News fix, I noticed a release by the NAR that has me re-thinking a position I have taken...

Here is the link to the NAR news release. To summarize, the position the NAR takes is that housing will start to pick up in 2008. Existing home sales will rebound, although new homes will lag for another year.

Well, I've been saying this for a few months (go back and look at my Gwinnett Market Reports if you don't believe me). And so, when the NAR says the same think, I need to re-assess my position.

Why, you ask?

Because the NAR started calling the bottom of the market and the rebound before the decline was in full swing. And that really ticks me off. I don't have a problem with putting a good spin on things. We all do it, and sometimes we just need to in order to remind people about the other side of the coin. Whether it is a Buyer's Market or a Seller's Market, it is a crappy market for half of the people in a transaction...

But, it's one thing to put your best foot forward, and quite another to say that everything is always perfect. I run numbers for my market... and I make predictions based on those numbers. When I am wrong, I acknowledge it, and when the news just sucks, I say it. I don't try to speak out of both sides of my mouth just to make sure that I'm covered.

Right now, if the NAR announced that skies were blue, I'd run outside to check.

Keep in mind that I am not only a member of my association in order to have access to the MLS (we don't have to be), but rather, I am currently active in the association (until tomorrow's meeting, I am the chairman of the RPAC committee). No, I'm not being deposed... my tenure is coming to a scheduled end.

So, what do we do about it?

Of the 33.548 real estate agents on A/R... as of a moment ago... I'd bet that the vast majority are members of the NAR. I know that the majority are ticked at the NAR over one thing or another. But, I would bet there are about 50 that are actually active in their local association. I bet half don't even know who is President of their local association, much less the state association.

So, get involved. Make your voice heard [I have NO idea this post was going this way].

And, when the NAR issues these reports, grab some salt, and run your own numbers.

Thoughts on the Foreclosure Bailout

Everyone has weighed in with their opinions about the proposed government bailout of some of the 1.2 million people facing foreclosure... I guess I'll toss out my nickel (side thought... if everyone that has offered an opinion actually gave up the nickel, WE could bail out the people facing foreclosure...)

I don't like government bailouts.

I'm a libertarian (I haven't joined the party, so I'm not a Libertarian). I don't believe that government has a role in every part of our lives. I think that the US Constitution is the guideline for the structure of our laws... and the role the government is supposed to play.

Even after looking at the Constitution twice, I can't find where it says that people that make bad decisions... mistakes even... should be bailed out by the government. And, that is what we are dealing with here. Banks lowered their standards for giving away money (and that is what they were doing, largely, giving away money). And consumers took out loans that they really didn't have a plan to repay.

So, who are the real victims here?

Is it the banks that are getting stuck with absolutely crappy loan portfolios? No. They got exactly what they deserved when some of them were driven right out of business.

Is it the borrowers that bought $500,000 homes and thought that their payments would remain at $1600/mo. forever? Or maybe the people that refinanced and bought bass boats and Suburbans with their "equity? Maybe it's the investors that bought property with 125% loans and then tried to put in minimal effort for maximum return with a flip? No, nope, and nuh-uh. Again, they ignored the risks so that they could do what they wanted to do. Being able to get someone to finance them only served as justification that their desires were not out of line.

Is it the mortgage backed security buyers? It wasn't, until the government decided to change the terms of the securities they bought.

But what about the fraud and predatory lenders?

Even running rampantly, fraud only accounts for a small percentage of total loan volume. So, it isn't much different than the teacher making everyone put their heads down on the desk because one kid in the class shot a spitball. And, many of the "predatory lenders" aren't that predatory. Sure, it is fun to talk about greed (a term that is vaporous to define anyway) and taking advantage of people in precarious situations, but we need to also keep in mind that the risk/reward equation means that these borrowers presented a higher risk. As some states have found out, when they "clamp down on predatory lenders" and cap rates or otherwise try to control market forces, they end up limiting choices for the very people they are try to protect.

So, instead of writing sweeping legislation, it would be much more effective to enforce current laws against fraud.

So, where does that leave us?

It leaves us with the only real victims being the one group that isn't being protected. And those that made irresponsible decisions being rewarded for those decisions. Instead of finding the 60,000 loans that might actually involve fraud, and prosecuting the people responsible, the government is looking at "fixing" 1,200,000 loans. And, while "fixing" those loans, nullifying agreed upon contracts.

It is a bad precedent.

But it's a tradition...

Thanksgiving is a time that we look back over the year and think of all of the wonderful things that we have to be thankful for. It is also a time for us to enjoy being with our families. And, being with family always gets the wayback machine firing on all cylinders...

So, while I was talking with my Mother about Thanksgiving meals, a few interesting things came up... not the first time.

I have spent my adult life being less than traditional. My ex-wife and I used to host our "Orphan Thanksgiving" feast every year. We had all of our friends... and their friends... that didn't have other family in town over for the Thanksgiving meal. We had some pretty big crowds. In order to satisfy the numbers, we often had other things with the turkey... like hamburgers, hot dogs, and lasagna. We would have a lot of the traditional foods, but there were always some "bonus foods."

After we divorced, I kept that little tradition alive for a while. I had friends over, but we skipped the turkey altogether. Pizza was the most prevalent dish served. Of course, the grill was fired up on occasion as well. Nothing says Thanksgiving like a grilled hamburger or hot dog.

Fast forward to this Thanksgiving...

The rest of the extended family was out of town. So, my lovely wife, beautiful child and I sat down for a Thanksgiving meal of... breakfast burritos. Not even turkey sausage in the burritos.

Of course, once again, my Mother was convinced I had committed a sacrilege. But, this is the same woman that used to make 20 courses for Thanksgiving... half of which NOBODY would eat. All in the name or tradition. Nobody wanted the mincemeat pie... but she made it for decades. (She goes out to eat with my step-father now).

"So, Lane, does this have ANYTHING to do with real estate?"

Since you asked... yes, yes it does.

There are a lot of things that real estate agents do because they are traditional. I do some of them occasionally, too. We hold open houses, place newspaper ads, fax things to people, and talk about being number one in customer service in our ads.

But, those aren't always productive. Open houses don't sell houses. Newspaper ads are shown to be a weak draw for a property (at best). I am working to be paperless, since all of the faxes make more paperwaste than anyone outside of this business can imagine. And, "1 is NOT the loneliest number" anymore... every agent in the country is number 1.

But, that is the way many agents have always done business.

According to the NAR, about 4% of us blog. Despite attending the convention last week where EVERYONE was talking about blogging, I don't think more than 10% ever will. And that will take a decade.

Customer focused websites? Client focused marketing? Rare at best. As an industry, we have gotten in to the habit of putting ourselves at the center of our universe.

It's a tradition.

If you are looking for a non-traditional agent, one that isn't afraid to turn things upside-down for better results, let me know.

GarageHomesUSA.

So, he's hit the "But that's the way I want it to be" stage...

Many of you might know that I have a three (and a half) year old son. He has graced a variety of my posts, and is one of the primary inspirations for me being in real estate... but I digress... Often.

So, while it isn't the first time, I wanted to relay a little story involving the "Boy Wonder."

Upon my return from the NAR Convention, my wife promptly left town... to do a little scrap-booking with her mother. She left Mini-Me in my care for the weekend. During one of our dinners, he became impatient. It went something like this...

"Daddy, is dinner ready yet?"

"No buddy, I just started it... give me a few minutes."

"But, Daddy, I'm hungry nooowwwww."

"Well, a few minutes ago when I asked if you were getting hungry, you said that you weren't."

"Is it ready yet?"

"No."

"Yes it is!"

"No, it isn't... no matter how much you want to change it... it won't be ready until it is ready."

Seems simple enough, right?

So, Lane... why are you writing this on a real estate blog?

Simple. He isn't the only one that is prone to statements like that. I've been seeing a lot more of them in the last few months. Sometimes it is from those that lobby on our behalf. Other times it is from those inside the industry.

"Real estate sales are off by 15%"

"That isn't bad."

"The trends aren't pointing to a recovery yet. It could happen, but we can't know."

"Yes they are! Everything is hunky-dory. We are already seeing the recovery."

"No, it isn't... no matter how much you want to change it... it won't be ready until it is ready."

Let me make this clear. I believe that real estate will see a large scale recovery in the next year or so... but it might not. Then again, it could be sooner. Where I have the problem is when we are faced with a difficult market, some in the NAR, and many agents simply say that everything is great. One might almost think that they feel if they say it enough, it will be so. But, just as with the media talking of values "tumbling" when they drop a few percent, saying that there is "nothing to see here" when there clearly is... doesn't help make us look honest and transparent.

There are incredible opportunities. But, as investors know, there have to be risks. Those that get in BEFORE the recovery is piling away at full steam will get the best returns... and, as in the last cycle change, the last ones to the party just get to clean up and don't get to play in the fun.

New pricing model

I'm still out here at the National Association of REALTORS(R) Convention in Las Vegas. So far, it has been a pretty cool experience. Sorry I don't have any pictures, I actually have carried my digital camera with me everywhere... but I haven't even seen the strip.

So, what interesting stuff is here for consumers? Just about nothing. But, as a REALTOR(R) there have been quite a few interesting revelations. One thing I can say for sure is that I have found a new pricing model that has amazing potential. CMAs (Comparative Market Analysis) look to be a thing of the past for me. I attended a seminar yesterday on "Right Price Analysis", or Absorption Rate Pricing models.

I don't think it could sound any drier... Oddly, the session was the most entertaining one I've been to. The material was extremely interesting, and the presentation was excellent.

"So, what are you going to do about it, Lane?"

Look for a new method for me to deliver my market reports. I will be using absorption rates in my market reports. Basically, this will cover how much inventory is on the market in different segments, and what percentage of listings are actually selling. It will be a much more accurate picture of the market, and can be scaled up or down. I will literally be able to give a reasonably accurate picture of the market activity in a subdivision, as well as its direction.

I isn't the most exciting thing to hear about, but I hope that the results will be more helpful to people getting in to the market as buyers and/or sellers. If you want to be ahead of the curve, call me or send me an email, and we can do a RPA for your home that you are looking to sell. (please keep in mind that if you are currently listed with another agent, I cannot talk to you about your property, or I could lose my license).

I have a few more classes today, and I hope to run across some more exciting information.

Wandering through the DoJ website

What is it going to take to make them happy? Did someone at the DoJ have an unsatisfactory experience with a real estate agent? Or is it simply that they know our approval ratings are down there with our Democrat led Congress (which would love to have even the dismal ratings of George W. Bush), so we are an easy target?

There is an interesting report called "Competition in the Real Estate Brokerage Industry" that is a pretty interesting read... ok, not that interesting as a read, but interesting to look through because of the way things are presented. I'm going to give my personal impressions after spending the morning looking through it online.

• They really don't like full service brokerage. At every opportunity the report bashes full service brokers.
  
• The data that they use often contradicts what they are trying to point out. Some examples of this would be that there isn't sufficient competition in the industry either at the brokerage level or at the sales agent level. But, the report begins by stating that there are no significant barriers to entry to the sales agent level, and few barriers to entry for the brokerage level. It also states that there is a lot of fluidity in the industry. Finally, it states that competition is fierce... but apparently not fierce enough, because it says that competition is needed to bring prices down for consumers.
  
• More and more consumers are choosing to utilize full service brokerage models... even though there are more brokerages offering other than full service options.
  
• There are very few mentions of limited service brokerages offering fewer services for consumers... but plenty of mentions of consumers saving money by utilizing flat-fee or limited service brokerages.
  
• Commission rates have been going down, but not fast enough for the DoJ. Because home prices were rising, average commissions were still increasing. But, because of the low barriers to entry, the increased competition led to the pie being split more ways. One has to wonder if the DoJ wouldlike to see more agents (more competition) or fewer agents (less competition, but perhaps ?more reason to cut commissions?).
• The DoJ asserts that the MLS is imperative to consumers, but decries the fact that it is owned privately.
  

I was really disappointed. There are so many contradictions, yet in EVERY case, the DoJ asserts that the real estate industry is flawed. The price that is agreed, even though there is fierce competition from many players, must not actually be fair... and is a result of a restraint of competition. The restraint of competition is because there are too mazny competitors...

It goes on...

I think there is someone at the DoJ that dealt with a crappy agent and has decided to go after the entire industry.

Buyers are liars... or not so much

I know, I know. It is one of those pervasive statements in real estate. Everyone in the business says it.

Buyers are liars.

But, are they really? I don't think so. My buyers tell me exactly what they want, and then they buy it. When they don't, I eventually figure out I'm not listening. Occasionally, I figure out that they really don't know what they want... or maybe they know, but just don't know how to communicate it.

Usually, when I fall back on the "Buyers are liars" line, I find out that I am putting my desires in place of the buyer's desires. That might be the toughest thing to stop. I have to take off the "Lane glasses" and get back to being a conduit for my client.

Here are some of my filters...

How could anyone want less than a two car garage.

Twisty driveways suck.

Kitchen appliances come in three colors, black, stainless steel, and "in need of replacement."

TVs, even flat screens, do not belong above the fireplace.

While I have a reason for every one of them, my buyer's might not feel the same way. I have to constantly STOP filtering my clients desires through mine. It is human nature to put our own spin on what we see and hear.

Oddly, they stop lying to me when I start listening to them again. I think I get better at this every day.

Feel free to drop in to my new website and take a look. I'd love to hear your reactions. It's still under construction, so pardon the dust.

Imputed income

Familiar?

Let me give you a quick idea of what it is. Keep in mind that I am not a tax professional, or a lawyer... just a real estate agent.

I guess the easiest way to say it is that it is phantom income. For our current purposes, let's look at a short sale. Let's say that the seller owes $300,000 on their home. In the short sale, the property sells for $225,000. Obviously the difference is $75,000. When the bank takes the loss, they report the write-off as income to the "recipient", the seller. So, that year they get a huge income boost. And they owe taxes. Nice, huh?

Congress is working on altering the tax laws so that people aren't stung by this in many cases. We'll see what happens.

But, that's not all...

A few years ago, a plan was floated to Congress to actually expand imputed income. Some lobbyists felt that there were people that were "unfairly" gaming the current system, and taking advantage of others. How were they doing this, you ask? They bought homes to live in.

You see, these people weren't paying increasing rents. Instead, their fixed rate loans had largely the same payment for years. So, while renters were facing increased rents over time, homeowners had the same payment until they moved or {gasp} paid off their homes. That isn't fair, is it? (trust me, I am shaking my head...)

What to do? Well, figure out what the market rent would be for a homeowners property, and then charge them the difference as imputed income. So, our villain (Biff the homeowner) pays $2000/mo. for his house payment. If he were to rent a similar house, the cost would be $3000/mo. So, obviously our villain is getting over. He is saving $12,000/year compared to the less fortunate (those would be the renters...). So, maybe he should have to pay tax on the extra income.

Luckily, some of our congress critters figured out that they would be committing suicide at the ballot box if they actually tried to implement something like that. Not to mention that every extra penny collected would be swallowed up by the new agency that would have to figure out the rental value of every owned home in the US.

ggrrrr..

The sky is falling... and the bubble is coming...

Sorry to disappoint.

I picked up a story today about a "Bubble Blogger" in San Fransisco. I actually enjoyed the article. Here is the link. I have read a few of these bubble blogs in the last couple of years. Some are quite educated, and others are just rants. I actually haven't read this particular blog, although I will be putting it on my reading list. I just wanted to talk about the news story...

First, was it a slow news day in San Fransisco? Was there nothing else negative happening in real estate for the paper? The reason I say this is two-fold. Not only is there some sort of perverse desire on the parts of some in the media to constantly have a negative real estate story in the news, but this one isn't even that strong.

Next, if one makes a plausible, but vague prediction, and then attaches no time frame to it, it will probably come true. I can predict that the stock market will hit 20,000 as well as say that it will suffer a 10% correction. In the next several years, both of those will come true. That isn't some amazing feat of prognostication.

Finally, I see that Mr. Killelea was looking to buy a house in Berkeley in 1999. I'm curious (and maybe one of you agents local to that market can tell me) what the prices were then, and what they are now. Had he bought the over-priced home eight years ago, what would his position be now? What was the median price in 1999, and what is it now?

In conclusion, I just want to point out that it is easy to make a vague prediction with no timeline and eventually have it come close to true. Making a specific prediction about the market, that includes a reasonable timeline is a LOT more difficult. But, let me say here that another housing bubble is coming. I won't say when or where, but it's coming...

Oh yeah... Comments? Ratings?

What are we doing here? Looking at the housing landscape...

This morning, the NAR kindly sent me this little update through the Real Estate Insights eNewsletter. It explains, quite well, the steps that we will need to move through before the market stabilizes, both locally and nationally. And then, this afternoon, in my REALTOR(R) Magazine Daily Online, I got this story.

Both have something underlying that I think is very important. Congress needs to stay out of the mortgage meltdown issue. While there might be a need for revision of the jumbo loan limits for some high priced markets, anything beyond that will have unintended consequences that would be bad for the housing market. (BTW, unintended consequences seems to be my comment theme of the day) In the second story, there is a mention of Barney Frank calling for more regulation of the mortgage market. He feels it would increase confidence... and it may. But, it would also increase compliance costs, and slow funding. And, as we know from the myriad of regulations that abound for everything the government want to protect, those that mean to be unethical will still be unethical. Those that are hell-bent on buying something they can't afford, will... and they'll still default. But, there will be those on the margin that won't be able to buy their dream home because there is another point of interest, since the regulation means more costs for the lender.

And, as well highlighted in the first linked article, the correction is underway. Before Congress could even think of acting, the market started to fix itself. Is it going to hurt people? Absolutely. Will it hurt people that were responsible in selecting appropriately priced homes and financing products? Not so much. Mostly, the people that will be hurt are those that used products that they didn't understand to buy houses they really couldn't afford. Some did it in ignorance, but many just didn't care or didn't think through the logical conclusion of their actions.

Am I mean to say so? Maybe. But, that doesn't mean I'm wrong.

The good news is that the needed steps are happening (without Congress critters, thank you very much) and the housing market is correcting. Deals are staring smart buyers right in the face, and those deals are selling. As we look in the rear-view mirror of market reports, we can see that the worst is over in many places... and other places still may have some correcting to do.

I like to hang it out on my market reports. For Gwinnett County, I'm calling the bottom of this cycle to be in the next six months. Of course, I might not really see it for a month or two after it passes. And, if something wild happens, all bets are off.

What is a Seller's Market?

I previously covered Buyer's Markets and what they meant for both buyers and sellers. Feel free to look over that blog entry in conjunction with this one.

Before I dive into talking about a Seller's Market, I want to cover a neutral market very quickly. When there isn't a Buyer's Market or a Seller's Market, there is a neutral market. It lasts about 13 minutes, and just about never in more than one block of property in the country can be in a neutral market at any given time. So... on we go.

There are a few markets, and micro-markets (Thank you Jennifer Bukaty for that term) around the country that are in Seller's Market's even now. Despite the loud whining sound coming out of national media and others, there are places where seller's are outnumbered by buyers seeking their property. And, that is the definition of a Seller's Market. A few years ago in southern California, buyers would bid over list price in order to have a shot at buying a property. Sometimes one could actually flip a property without improving it simply because the values were moving up so quickly.

Obviously, as with the Buyer's Market, in a Seller's Market there will be pockets based on price or area that are less popular. Right now, for example, because of the sub-prime mortgage issues, the tightening of credit, and the $417,000 government backing cap, there are cool spots in the hottest of markets. Properties over $500,000, and properties under $150,000 are less attainable, so they are less hot.

So, we've established that a Seller's Market gives sellers more power when dealing with buyers. But, why do we have a Seller's Market in the first place? Well, there can be a lot of contributing factors. Some of them would include:

• coming off of a buyer's market, the release of "pent up demand" triggers a lot of buyers hitting the market at the same time
  
• local jobs increases, large employer relocating to the area or opening a new facility
  
• loosening mortgage market
• falling mortgage rates

Of course, that list isn't complete, there will always be new and unique factors that will present to launch the market into a hot market. Sometimes it seems that nothing triggers it and it just happens, but generally there are factors listed above that moved the market.

So, Lane, I'm selling my house... what does all of this mean?

What it means to a buyer is that you may be in the driver's seat. Assuming your house is in good condition, staged well, and is desirable, marketing is easier, and pricing will be higher than it might be otherwise. Of course, if the property is priced too high, there will be less activity, and you might have your own little bad market. You can be sure that if your house is sitting in a strong Seller's Market, buyers will wonder why. They may even steer away from it. Going for the throat with aggressive (high) pricing may actually hurt you.

Ok, Lane, I'm a buyer and this is a tough market. What can I do?

Be ready to buy. Get your financing in order. Mentally and financially prepare yourself to offer on a home that you like. It really is that simple. In a strong Seller's Market, many desirable properties will sell in days. If you have a good search set up with your agent, you will know about the property quickly, but so will other prospective buyers. Beat them to the table and present a strong offer. Strength isn't always price (although that is a definite factor). It can also be the solidity of financing, as well as (lack of) other contingencies.

What is a Buyer's Market?

In real estate, as with other sales markets, there are three phases to the market. There is a Seller's Market, Neutral Market, and the subject for this post, the Buyer's Market.

For most markets, and most price ranges right now, we are in a Buyer's Market, but what does that mean? You've heard it on the news. Clark Howard has even said it. Simply put, a buyer's market is one in which sellers outnumber buyers, so buyers have the power.

One thing to keep in mind is that even in one general area (Atlanta or Gwinnett County for instance), there will be hot spots and cold spots. There will also be hot and cold price levels. So, while real estate markets are local phenomena, that "local" might even come down to the level of a particular subdivision or price range. Houses in the $500k range might be stagnant, while $200k can't stay on the market. Condos might be flying out of the listings, and single family homes won't move without discounts.

So, we've established that a Buyer's Market gives buyers more power when dealing with sellers. But, why do we have a Buyer's Market in the first place? Well, there can be a lot of contributing factors. Some of them would include:

• coming off of a hot seller's market
• local job cuts, large employer closing or other economic problems
• tightening mortgage market
• rising mortgage rates

Of course, that list isn't complete, there will always be new and unique factors that will present to launch the market into a slowdown. But, there is one thing that can end a Buyer's Market just about every time... (I'll get to it in the "What should a seller do" section)

So, you're a buyer... what does it mean to me?

Well, it means that sellers are going to be more inclined to work with you on the price or other concessions. Of course, one issue that often arises in buyer's markets is that financing is tough, so make sure you have yours in order so you don't lose earnest money or spend money on wasted inspections or other items. A Buyer's Market doesn't mean that sellers will cut 40% from the price, but it means that if they don't want to sell at a price you want to buy, there is another house to offer on... if there isn't, then it isn't a buyer's market.

But, Lane, I'm a seller... what can I do?

The ways to overcome a buyer's market are to price appropriately (lose the "I sold for more than the people up the street" ego), stage effectively, market well, make sure your house is in top condition, and be ready to work with the serious buyers. Serious buyers. Make sure that you aren't pulling your house off of the market for buyer's that can't perform.

Y is for Youth

Welcome to the home stretch... and I do mean streeeetch.

If you've been following along, you know that I have been running a series of posts going from A-Z. I am almost done, even though I don't know what Z is going to be yet...

It's Y time!

Youth... and real estate... how am I going to tie them together?

OK, I got it.

Again, anyone that has followed along knows that I am a car guy. Well, here's a shocker, I'm a NASCAR fan as well. While I'm not really a Michael Waltrip fan, he did something back during the week leading up to the Daytona 500 that gave me a lot of respect for him. (I can hear you asking yourself where youth and real estate are going to work their way into this little story)

As any race fan knows, teams look at rules differently that the rest of us. We see rules, and we look for ways to comply. They see rules, and they look for loopholes. The object isn't to cheat, but rather to exploit the weaknesses in the rules. I have a little bit of racer in me, too. However, I don't have the same type of risk that the racers have. If I really stretch out here, I might point out that any lawyer with a contract in front of him is thinking the same way a crew chief is with a rule book... but I digress.

Back during the 2007 Daytona 500, Michael Waltrip's crew chief pushed several rules too far. He lost points, he lost money, and he lost competitiveness. But, he lost something else. At a news conference, he was asked about his infraction, and how it would impact the future of his team for the season, as well as how it impacted him. Keep in mind that all of the teams view the holes they find in the rules to be where competitive advantage lives.

Michael Waltrip explained that when he got home, he had to explain to his young daughter what happened. She looked at him point blank (and he said she had tears in her eyes) and asked him, "Daddy, are you a cheater?" He started to tear up a little as he related the story. (maybe I'm a sucker, but I bought it) Keep in mind that MW isn't just a driver that shows up and drives the car, he owns the team. If the team is cheating, he's a cheater. He had to tell his little girl that he was a cheater, that he got caught, and that it was wrong.

I don't know about anyone else, but I think that might be a harsher punishment than a $50,000 fine.

So, I'm almost to the part where I tie this up in a neat little package.

In the eyes of a child, there is right and there is wrong. Kids don't deal in gray. If you break the rules, you're a cheater.

What about in real estate? Can we stand up to the scrutiny of a kid? When we deal with our clients, our customers, our vendors, do we deal as honestly as we can? Do we disclose the problems we find? Do we tell our clients that they need to stop looking for a way to game the system, and take the lumps? Do we deal with all parties honestly?

Forget about agency rules. Forget about the NAR Code of Ethics. Forget about HUD law. Think about your kids. Are your's the actions that you expect from your kids? More importantly, are they the actions of which your kids would be proud?

I know that my dad did things in his life of which he would not approve had I done them. However, I also know that on balance he led a life that he would approve of had it been mine. I hope that I am able to offer as good of an example for my son.

X is for Xenophobia

I think I was at E when I figured out what the subject of this post would be. As I was writing about ethics, I knew that I would just have to do this post. However, I'm going to stretch the definition to fit my needs.

Simply put, xenophobia is the fear of foreigners, or more commonly, the fear of those that are different. Despite the etymology of the word pointing more towards birthplace or culture, I will be using the looser definition.

Like Garth in Wayne's World, as he was speaking to Rob Lowe's character after the basement show goes big time, I think that we all fear change to some degree. As a great example of this, take a look (or better yet a listen) around you. People reach a point where they simply stop dealing with change as easily as they had previously. Not all, but many seem to hit that point in their senior year in high school. People that graduated in 1973 will think that good music largely stopped then. The same for 1983, 1993 or 2003. Or even 1923. At some point later, hair seems to get stuck in the timewarp next to the music collection (I don't mean losing it, I mean not wanting to change it)... clothes, too. I still hate wide ties, and my Dad could never understand narrow ones.

OK, I hate all ties, so nevermind.

Left turn, and back off my tangent...

Many, if not most people fear change. Looking at it more deeply, we fear that with which we aren't familiar. Personally, I think that is the basis of xenophobia. But, like the fear of sashimi, there is something to be learned by overcoming that fear. I think that what we can learn is that there isn't anything to fear. Those we fear are pretty much like us. They might look different, eat differently, or even love differently... but so do we when looked at through their eyes.

"But Lane, how does this apply to real estate?"

I promise that I had this coming a LONG time before this, but just today, Eric Kodner and Charles McDonald had GREAT posts (with excellent comments as well) about Fair Housing and the practice of real estate. The "X word" even showed up in the comments.

The point for real estate agents is that we CAN'T be xenophobic. Furthermore, we can't let our sellers be xenophobic. And, if our buyers are xenophobic, we can't let that influence the way WE do business. Xenophobia, bigotry, racism and prejudice aren't illegal (long comments about that...) but that doesn't mean they are ethical. And, acting upon those beliefs or fears CAN be illegal, as well as unethical or immoral.

But, getting past xenophobia CAN be fattening. Think of the amazing foods. Beef Momo from Tibet is amazing. Nigiri Maguro (tuna on rice sushi) with a hint of wasabi is great with saki. And, don't forget a rib sandwich on white bread from Fat Matt's Rib shack on Piedmont Avenue in Atlanta (go at night, catch live blues). Skip lutefisk... lye is NOT a seasoning.

Keep it real.

W is for Win... and Win

One of my favorite things about residential real estate is that everyone can win. Think about it. We have a seller. The house is generally no longer serving their needs. Maybe they are leaving the area because of a new ob, a transfer or retirement. They might be having a new child, kids moving off to college, or moving up to a new house because of a promotion.

I know, sometimes people are moving because they can't afford the house, or they got laid off. Companies move, and people don't want to, but have to. But, I've found that most of the sellers I've dealt with are happy to be moving. Most have enjoyed being in their home, but are ready to begin in a new place, and genuinely excited.

Next up, we have a buyer. Maybe they are transferring, or having a new child, or shipping one off. They might be retiring, or celebrating a big promotion. But, it's all of the same stuff that motivates people to sell, and like sellers, most are excited and ready to begin a new stage in their lives.

Then comes the offer, inspection and negotiation. We have closings and loan applications and second thoughts. This is where the trouble lives, deep in the shadowy liar of other stuff that needs to be done.

Usually, when the buyers send over an offer that the seller accepts, everybody is happy. Then, something occasionally infects someone. Inspection negotiations, or some last minute surprise pushes out the trouble monster. He tries to turn the win/win into a win/lose. That is the point a good agent needs to step in and try to tame the trouble monster.

This isn't tennis or football. Real estate is not a hockey game. In order for there to be a winner, there does not have to be a loser. Everyone in the transaction CAN get what they want. And don't forget, Karma is a witch. If one feels the need to make the other party in a real estate transaction a loser, someday, it will happen to you... and Karma also loves a pile on. Even in the same transaction, beating up the buyer or seller over the inspection might mean that the seller or the buyer beats back before closing... or even not closing. Then we have the worst outcome. Lose/lose.

I don't need bad Karma.

S is for Staging

***I'm proud to have a guest host for today. Angel Walker is a professional stager here in the Atlanta area. Here is a quick bio about Angel.

Angel Walker is an Accredited Staging Professional Master™ and the owner of Staging Professionals, LLC. Angel received her training directly from Barb Schwarz, the CEO of Stagedhomes.com. Prior to founding Staging Professionals, LLC, Angel had over 10 years experience in corporate marketing. Angel specializes in Staging occupied homes
in North Atlanta. www.stagingprofessional.com

S is for Staging

There has been a ton of buzz around Staging in recent months. It has been great to see the word getting out about the value Staging can bring to the residential real estate market.

Why Stage?

There is over 9 months of inventory on the market right now. With so much to choose from, Sellers have to do everything they can to make their house stand out among the crowd. Statistics tell us more and more Buyers are shopping online for their next home. Staging prior to listing improves the pictures posted online and creates an inviting feeling for Buyers who view the home in person.

If you were selling your car tomorrow, you would probably get it detailed. When we Stage, we detail the house like you would detail your car. Where is your equity?

There are several myths about Staging, and I would like to dispel a few of them.

Myth #1: Staging is decorating.

Staging is actually the opposite of decorating. Stagers de-personalize a property so that a Buyer can make their own connection to the home. There have been times when I felt like I’d known the Sellers for years after viewing their home. That is not the impression a Seller wants to make upon a Buyer. The goal is to get a Buyer excited about creating their own memories in the house, not reliving someone else’s.

Myth #2: Staging is expensive.

Stagers can work with just about any budget. Sellers have to determine how much time and effort they can put into preparing their home for sale. If money is tight, hire a Stager for a Consultation. This gives Sellers a roadmap of recommendations they can implement themselves.

To make the most impact in the shortest amount of time, hiring a Stager to do the work is the way to go. Many Stagers work in teams. The combined creativity of several professionals trained and motivated to Stage cannot be put into a Consultation. Every time I’ve worked on a Hands-On Staging project, I’ve been blown away by the transformation. The feeling of the property changes. It’s hard to describe in words, but it is what I love most about this industry.

Every Stager sets their own pricing. Find a few Stagers in your area and contact them directly to get a feel for how they work and how they price their services.

Myth #3: I’ll just take down my family photos.

Stagers look at the entire house, up and down, inside and out. If it is included in the sale, the Stager is looking at it. Are the light fixtures full of cobwebs? Is the carpet worn and stained? Is the bathroom too dated for the price range? How does the furniture flow? Stagers point out recommendations to improve the property so that it compares favorably to the competition. The recommendations are prioritized so the Seller can decide what they are comfortable doing within their budget and time frame.

Why hire a Stager?

We love what we do and we bring passion and creativity into every client’s home to assist them in achieving their goal of selling as quickly as possible for the most money.

Angel Walker
Accredited Staging Professional Master
Staging Professionals, LLC
Specializing in Staging Occupied Homes in North Atlanta
www.stagingprofessional.com

R is for REALTOR(R)

I know I'm being picky, but this needs to be said.

All REALTORS(R) are real estate agents, but all real estate agents aren't REALTORS(R).

One becomes a real estate agent by passing a test. One becomes a REALTOR(R) by joining the National Association of REALTORS(R). In order to join the NAR, a REALTOR(R) must attend special ethics training, and agree to abide by the NAR Code of Ethics. As a consumer, if interested in what this means, feel free to look at the NAR website for more info.

Not only are all real estate agents not affiliated with the NAR, according to the NAR, only about half are. And yet, the very vendors we deal with, as well as consumer experts (like Clark Howard) use the terms REALTOR(R) and real estate agent interchangeably. I'm just picky, personally. However, I have been through the NAR ethics training, and I feel that it is my duty to deal with ALL others in a transaction in an ethical manner. I pay my dues (one reason that many choose not to join).

To be sure, I want to state for the record that there are MANY fine real estate agents that are NOT members of the NAR. Their personal ethics are as good as any member of the NAR. There are also REALTORS(R) that are far less ethical than the NAR Code of Ethics require. (At this point I would like to say that any consumer should get to know their real estate agent, whether they are a member of the NAR or not, and make sure that their agent is really working on their behalf). A big advantage of working with a REALTOR(R) is that there is an extra layer of accountability. Not only am I accountable to the the state real estate commission, but I am also accountable to the local and state associations.

I am a member of the DeKalb Association of REALTORS(R), as well as the Georgia Association of REALTORS(R), and the NAR (it's a package deal, really).

Q is for Quit Claim

Let me preface this by stating I am NOT a lawyer, I don't play one on TV, and I don't dispense legal advice. If you need specific legal advice, you need to talk to a lawyer, not a real estate agent.

A Quit Claim Deed is kind of an anomaly in the world of deeds. Other deed transfers convey ownership of something to someone else. When propert is conveted with a General Warranty Deed, Executor's Deed, Foreclosure Deed, or Special Warranty Deed, these say that a person that has control and the capability to sell a property.

But, with a Quit Claim Deed, the Grantor may not actually have control of the property, or the ability to convey the property. But, that isn't what a Quit Claim Deed is for.

What it does is clear "clouds" that may be on the title. Let's look at a couple of scenarios.

CJ buys a house. Later, CJ meets and marries TJ. After several years of marriage, there are problems, and there is a divorce. After everything settles down, CJ wants to sell the house. TJ never owned it, and was never on the loan. The divorce attorney, or possibly even the real estate attorney might pursue TJ to sign a Quit Claim Deed to prove that TJ does not have an ownership interest in the property.

In the above example, the situation could have just as easily allowed TJ to have an ownership position in the property that they abandoned with the Quit Claim (assuming that CJ could maintain financing on the property).

Another example might involve a will. XJ leaves the house to one of the children, ZJ. The other children, WJ, YJ and JK might also be asked to sign Quit Claim Deeds to show that they do not have an ownership interest in the property.

Often, a Quit Claim is only brought into the picture if there is some sort of dispute. In other cases it is brought into the picture to prevent later dispute. The thing to keep in mind is that it doesn't convey property. It only shows that the Grantor has no ownership interest in the property. Finding a string of Quit Claims on a title search aren't necessarily a problem. Buyer's Title Insurance is almost ALWAYS a good idea, regardless of Quit Claims that show up on the search.

P is for Pictures

If your listing doesn't have good pics, you'd better make it REALLY cheap. REALLY, REALLY cheap.

84% of buyers these days start their search online. They aren't looking for prose. They want pictures. They want lots of pictures and they want those pictures to be good. If there aren't good pictures from good angles that are lit in a manner to let them see the features they want to see, they move on.

Here in the Atlanta market, there are more than 100,000 homes for sale. Obviously these homes are in a variety of price ranges, and locations. They feature wide ranging levels of amenities and finishes. But, do you think there aren't any other homes competing with yours? If one house has great pictures of a beautiful house, and the next has a picture of the front, or even no picture (the horror!!), do you think that buyers are going to spend their valuable time investigating that house? Keep in mind that there ARE houses with excellent and plentiful pictures in their search as well.

There are several steps that one should go through to insure the best possible result.

• Talk to the agent that is going to list your home. Among the things you should talk with them about are staging and photographs.
• Get a consultation from a home stager. You might need to spend some time removing wallpaper, painting, or doing other things to show your home in the best light.
  
• Suck up your decorating ego. Staging for sale is not all about decorating. It is about showing the house in a manner that lets the buyer move in mentally. Homes that are too personal to the seller might be beautiful, but that doesn't mean they are staged to sell.
  
• If you really hate what you were just told by the stager, get a second opinion.
• Complete the needed work. In some cases, this might mean doing the work, in other cases this might mean hiring the stager to "set" the house.
  
• Get pictures. If your agent isn't able to produce quality pictures, get them to bring in a photographer. The higher the price, the more willing your agent should be to bring in a professional photographer. There are some agents that will be able to make great shots, others are pretty challenged. Look at the pictures.
  
• Make sure that your listing looks good on the MLS, as well as on realtor.com. Realtor.com is the most heavily trafficked real estate website, and only REALTORS(R) have access. I would also recommend that the listing be "enhanced", which is an extra service that your agent should have.
  
• Keep the pictures reasonably updated. Snow in the summer, and spring flowers in the winter are clues that the listing has been sitting.
  

As with all things real estate, there are variations. But, it should be easy to get the idea. Make sure that YOUR house looks better on the internet than the house you are competing with. Those pictures ARE the first impression.