Williamsburgs Real Estate Blog and more!

 Sunday, May 15, 2011

It's been a while since I posted some suggestions on searching for your next home or inventory data, but recent conversations with some of my REALTOR buds reminded me to try again to suggest a better way to search for homes. Plus a friend of mine is going to be putting his house on the market soon due to a relocation for work, and I was working on a comparative market analysis looking at HIS market and potential.

It's seems that many searches-by agents and buyers alike-start with price or a price range. While I agree that's definately an important component of a search, make it the final component-not the first. Most buyers today have "needs", followed by "wants". A person with five kids probably can't squeeze into a 3 bedroom home. They might need 4 but want 5 or even 6. Someone with a disability and handicap accessibility requirement might need a 1st floor living option, so that 3rd floor condo with no elevator might not be a good fit, even though the price may work. Chances are you don't need a pool, but might like to have one, if everything else is even and you essentially are getting it for free in most cases!

You get the point. Whether I am working with a buyer or doing a comparative market analysis, I start with the features of a home, and eventually factor in the price. I've whittled down a search from over 150 possibilities to TWO, before I even factored in the price. I'm not talkin' about weird things either! How about FOUR BR's, 2.5 baths, 1/2 acre lot with one-three school requirements.

If you use the search portal on my website (www.JimMellen.com/WilliamsburgMLS) you can do this yourself with more options and criteria than most websites-even REALTOR.com. Here we go:       

• Location:James City County or City of Williamsburg
• Detached/single family home
• Four Bedrooms
• 1st floor master bedroom
• 2.5 baths minimum
• Two car,attached,side load garage (so no one see's the garage clutter!)
• .33 acres minimum
• 2400SF (because the one you're in is smaller-you need more room)
• Jamestown High School

Here's the progression as I added criteria:

• First two criteria yield 837 possibilities
• Four bedrooms or more down to 482 choices
• 1st floor MBR down to 287 choices
• 2.5 Baths (more potties the merrier!) down to 237 possibilities
• .33 acres or more (that's not too large either) down to 186 choices
• 2400 SF minimum (that's a NEED!)-down to 182 choices
• Side load garage (could be a need, but might be a "want") down to 128 choices
• Jamestown High School-whittled down to 55 choices

Not bad-from almost 900, down to 55. We haven't come through the price discussion yet, or some of the other possible choices like age, HOA fees or not, type of flooring, kitchen counters etc. We have numerous additional criteria at our finger tips to find the PERFECT match if one exists!

Now let's throw a price into the mix-say $300,000. Still a big number but not necessarily for Williamsburg. If you followed along with the search criteria above-I got NO POSSIBILITIES and you should have too. Now we can raise the price or start removing the wants-garage,MBR level whatever you think you can live without. I'm going to remove the lot size and garage...now I still have NO choices. Wait a minute-isn't this a BUYERS market? What about all the talk about excess inventory?

OKAY, you can live without a master bedroom on the first floor. How many choices now? ONE! Now let's try no high school choice, up to 15, whew I thought you were going to have to BID on your only choice!

The purpose here is to show you that inventory may not be what you think or hear-at least in the current Williamsburg market. Location,age,condition and features limit your choices before you even get to price. So start your search or comparative market analysys with the criteria first, then add your price. With the above criteria removed, except for location and price range-under $300,000 I would have 212 homes to choose from. I would NEVER show you 212 homes, or try to do a CMA with 212 homes. We'd never accomplish anything.

Work smarter, not harder!

It seems as though every third person you meet might be a real estate agent,knows a real estate agent, or perhaps, used to be a real estate agent.

There was time when every other person was a real estate agent. They said in California in 2005 if you were pulled over by the CHP, they didn't ask for your driver’s license, they asked for your real estate license! Fortunately that's not the case today, but what a scary thought...can there really be THAT many people who are experts and qualified to help people

make one of their most significant financial decisions?

Let me start by clarifying something. There are two "classifications" of real estate agents. A real estate agent is licensed by a state to represent and negotiate a property transaction for a buyer, seller,landlord or tenant or in some cases both sides. A REALTOR is a licensed agent who belongs to the National Association of REALTORS. A REALTOR will always capitalize REALTOR as that is the requirement of trademark use. There are some 1.1M members of the NAR and perhaps twice as many as that who are simply licensed. REALTORS must adhere to a strict Code of Ethics (behavior). Not to say that a real estate agent doesn't but simply put, they don't have to. And when you don't have to do something, it's easier not too!

I always ask how it is that a prospect found me or decided to contact me to interview me for my services. Often and most times it is through a referral, but there are times a buyer or seller comes through one of my websites or social media locations. I ask how did you find me, are you interviewing others, and what is it you want your agent to do for you? I am amazed that many times, that prospect will say they just walked through my door first, or they saw an ad or sign. While I'm glad they did, it's not like walking into a McDonald's and ordering a Big Mac. You''ll likely get the same Big Mac from Virginia to California. Not true with a real estate agent or REALTOR.

Here are some tips to interviewing or selecting the right agent for you:

• Ask for a referral from a friend or relative-who have they had success with
• Google or use the internet to find references about your choices. Do they have a verifiable and VISIBLE presence and participate in a "global" way. Do they blog, answer questions and even have a personal website-not just a corporate template.
• Call them. Did they answer the phone, and if not, leave a message-how long before they call back? Does their voice mail sound cheerful and enthusiastic? Are there limitations like if you leave a message after 6 pm, you won't hear back until tomorrow. Worse yet, did they not identify themselves as an agent or REALTOR?
• Email them. How long before you get a response-not an auto responder-a genuine reply to YOU.
• Text them-in today's world professional full time agent communicate via many ways and are in touch in numerous ways. For a buyer that's on the go, texting is a great communication tool for a seller who needs to confirm a showing appointment, timing is everything!
• Will they be able to make the tough decision to tell you what you need to hear, not what you want to hear? Will you be willing to accept that?
• Ask how they deal with problems. Are they proactive and have a way to try to minimize the things that come up. Have they been involved in enough transactions to know what can come up? Ask if they are a problem solver.
• Ask if they represent buyers and sellers in the same transaction or will they ONLY work for one side or the other. Integrity means everything when there might be a monetary temptation to work for both a buyer and seller on the same home sale or purchase.
• Ask for references but don't expect anything but glowing referrals. Have you ever seen someone say, 'call this person, I might not have done them right'
• Do they have a plan for you? Are they going to SELL you, or will they educate and coach you.
• Do they make you laugh and will they be fun to work with. This may be a long term relationship; do you feel you can get along?
  
  The bottom line, your relationship with an agent or REALTOR can be rewarding and successful or hateful and full of regret. It sounds like a good or bad marriage!
  
  I am amazed when I come across that person who simply called an office and got a random duty agent on the phone and neither person knows anything about the other. They start looking at houses or sign a listing agreement without any vetting. Scary. Yet it happens every day. I see people struggle decisions with far less consequence, like finding a parking space at the mall, than buying or selling a home.
  
  Be an informed buyer or seller. You have a million plus choices! It wil and should require some effort to weed out the small percentage who are the perfect fit for YOU! But it will make all the difference in a happy transaction and more importantly a smart decision.

So..you have decided that you want or have to move. You may not have decided that you want to rent or buy. Perhaps that decision is made for you depending on your employment,credit or other life situation.

So what is your plan B, if plan A doesn't work out?

Prospects come to me every day explaining what they want in a home. Sometimes they start with what they need, which is great. You have to have a "floor" of tolerance. Those minimums you can't do without. But what happens when what you need is not available?

The current generation is not used to the word NO. The previous generation is also not accustomed to hearing that nasty word. I can try to be conciliatory. I can educate. I can try to make it happen. But I can't perform miracles and when I finally get to that point and say no, what you want is simply not possible in my market at this time, I get silence. They have no back up plan, no alternative.

Say you have a job transfer, and you own your current home and selling fast and getting everything you want out of that transaction still leaves you falling short. Do you rent at both ends? Do you sell low in one place hoping to buy low in the other to make up the difference? Do you sell low at one end, and rent on the other end because you don't have enough left to buy?

What if you NEED to rent a horse property and have a limited budget, a tight time frame and no other apparent options? My suggestion is to start at the bottom. Plan for the worst and hope for the best. Hope is not a strategy for sure, but planning for the worst is. Maybe your plan would be to buy a horse property and that's your worse option. Maybe not. Maybe your worse option would be to sell your horses. Maybe it would be to have to pay for boarding your horses and renting a house. Maybe it would be to sell your horses, which would no doubt be a huge lifestyle change and perhaps unbearable.

Without a doubt, choosing and planning require some tough answers to tough questions. But you have to have a plan, and you have to allow time for it to work. Consult with local REALTORS. Explore all your options and don't rule anything out as a possible solution. Someone who offers you alternatives is trying to help. Maybe you don't hear what you want to hear, but if you hear it from numerous people and the options are becoming clear, I hope you have time to react, and come out with the best solution at the time. Otherwise, have a plan B well in advance. 

Here is a great new listing with the price and features you want-great price, 1700SF, 4 BR-2BA, just over an acre with wooded privacy!

Call Jim Mellen or your REALTOR today!

2010 is History!

2010 is gone, thank goodness. It has now been over 3 1/2 years since the housing "bubble" burst-at least locally. Looking back at the Williamsburg market, we had a robust, housing market for a remarkably short time. From early 2006 to early 2007 is the length of our "bubble" in Williamsburg. That's it-about a 12 month window. And it has been over 40 months worth of "correction"

Why so long?

Perceptions. Buyer perception-seller perceptions-media perceptions-government perceptions-and yes-REALTOR perceptions. Our local MLS roster swelled very quickly in 2006 and 2007. Everyone took and passed the ridiculously easy PSI exam to earn the right to help someone buy or sell the biggest asset of their lifetime. No one really questioned anyone's qualifications or expertise. Everyone knew someone in the "business". We still have a burgeoning agent roster where slightly less than 25% of the agents are able to make enough money to call it a career. Nearly half of all REALTORS in our MLS barely earn enough to get beyond the poverty level of income.

53.13 percent of our MLS roster has done 3 or fewer transactions that closed in 2010! That's combining at least one listing and one buyer sale. Only 15% of the agents have done 10 transactions or more. If you don't think that's a big deal. Look at it this way...who would you rather fix the brakes on the car your kids might be driving? The guy who got out of trade school that's done 3 brake jobs or the guy who's been doing it for the last 8 years and hundreds of brake jobs? Nearly 77% of our roster has listed and sold five or fewer listings. 94% of our roster has closed 7 or fewer buyers. It really boils down to the experience a transaction provides. I can honestly tell you that each and every seller and each buyer situation is completely unique, and you'll never see or know it all. But with more transactions, an agent can keep you on your toes and best prepared for what lies ahead!

If 2011 is going to be the year we break out of the slump, it's probably going to be the year of the professional REALTOR getting serious and the part timers getting out of business. Chances are if you look to buy or sell a home this year, and use a full time full service agent with experience and a track record of success, you will have a more successful and satisfying transaction.

Good luck and much success in the coming year!

It seems that we've been flat lined (sorry if you're reading this and have recently passed away-take no offense please) in the Williamsburg area now for about a year. And that is a good thing when we hear about other markets continuing to correct.  I'll take flat any day of the week!  Here is a link to some very detailed market stats for you to interpret how you see fit. I could find good news and bads news on every page of this 10 page market analysis! WILLIAMSBURG MARKET STATS

But new developments this week have me concerned because there is only a little chatter out there yet. But if you are an investor or buyer of REO properties you might need to be cautous for a couple of months. In those markets where they account for 20% of the sales there will be some effect. Luckily REO's are still a very small percentage of our market. Likewise the short sales are of course everywhere and part of our market but a relatively small percentage given our demographic of retirees and preferred destination.

What you may have heard about are the "robot or "robo" signers. Believe it or not, the sellers who have gone bankrupt or been bailed out of their house by their lender could still have a legal claim to the property. I don't think it's likely anyone who gave up the keys to the house will challenge the lenders foreclosure process, but when those poor victims who blamed everyone for everything feel entitled who knows what will happen. There are of course seller who turned in the key due to job loss, health issues or any other legitimate occurence that I have compassion for but not the individuals who used their home as a piggy bank.

It seems the title companies are beginning to refuse title insurance on special warranty deeds because there may not have been a real live qualified person ensuring the process was followed correctly. Perhaps these "robo" signers were over worked,underqualified or overwhelmed by the process and procedures were not followed.Check this video out!

Google "Robo Signers" and read some of the stories. If you look at the BOA/Countrywide mess where it takes over a year to get a short sale closed and all the internal problems imagine the ripple effect of having to start over or worse go to the investor or home buyer who has already closed and tell them they may not have the title they thought they had and the title insurance they paid for (on the banks behalf of course) is useless. Let's hope the government doesn't get more involved in trying to fix this too!

Williamsburg MLS 24 hour HOT SHEET!           

Sorry the only thing hot on this sheet is the new or changed real estate listings from the WILLIAMSBURG VA MLS! If you are looking for the newest listings, this is the place to look every day. If you are looking for something particular, take advantage of the listing portal search and save feature found at www.JimMellen.com/WilliamsburgMLS . Activate the portal to search for properties, or create a login in to build a more comprehensive search than you'll find anywhere else!

Click the photo to view the hot sheet for today-updated every hour to include the newest listings!

3104 Sapling, Toano VA 23168

This home is available for sale in Stonehouse for $625,000!

MLS number 30023439

Are you or someone you know looking in the Williamsburg Virginia area for a new home? Then you've found the best information here. This search will allow you to search more criteria important to you. Not just price,square footage or some basic info. YOU WANT DETAILS-and here's where you find them. 

You can search for basements,swimming pools,waterfront communities or communities with a homeowners association or those without! Want a screened porch and don't want a home on well and septic? This may be the only site where you can do that!

!f you need more specific info and I'll add it or create a search just for you!

Click the image below to open the search, and call me when you're ready to take the next step!

Professional Courtesy

There are few business models in the world where competitors are as cooperative as REALTORS®. In real estate though, we are quick to protect the professional image REALTORS® have or at least I hope have. 

However there are, as in businesses everywhere, clueless people that leave me scratching my head when it comes to how they conduct their business especially when it impacts my business and my clients. I'm talking about how scheduling appointments gets done and how the agent responds or doesn't respond when the buyer changes their mind after an appointment has been set.

When I schedule appointments for buyers I try to make sure they have already seen the property by doing a drive-by,have seen the MLS detail and all the photos and virtual tour posted. That should prevent any surprises and last minute decision to not go in the house. But it does happen, and it's happened to me too despite having the buyer as prepared as possible for what they are looking for and what they will find when they get there.

Are they looking for a ranch and do they know it's a two story. Are they looking for an easy property to maintain, but see the five acres differently. Do they want to walk to the grocery store but it's 7 miles from town?

The problem is at that point a buyer pulls up to see a home after scheduling an appointment they change their mind. Since most home buyers are also home sellers-how would you react if that happens to you the next time your house has a scheduled showing? It happens and I understand-been there done that. But I've picked up the phone-called the other agent so they can alert their seller that it's OK to go back to the house. It's easy and always has been appreciated. It's also important when my schedule goes astray. Suppose I'm running an hour early. Do I just show up at the house or do I call first to see if it's OK? Suppose I'm an hour late for a 5PM appt. DO I just show up hoping for a seat at the dinner table? NO, I extend a little professional courtesy and call my fellow REALTOR® so the seller is prepared.

The actions of one bad agent can ruin an entire company reputation or enhance it by that one simple act of professionalism.

Jim Mellen,REALTOR® PROFESSIONAL, RE/MAX Peninsula at New Town in Williamsburg,each office independently owned and operated

Hey, Mr/Mrs home seller....I want to buy your house for full price,cash,and close in 10 days.

Wouldn't it be nice to hear that once in a while? Heck, it would be nice to hear that once! The truth is, that's not a common scenario. Every offer has some sort of contingency. Most contracts are riddled with contingencies and if and what if's. They are there to protect buyers and sellers alike, and shouldn't be feared by home sellers,buyers and more importantly your REALTOR®.

The one that needs talking about today is the often feared home sale contingency. A recent discussion with a home seller and their subsequent conversation with family "experts" levying their opinion.

Over the last seven years I've participated in hundreds of offers/counter offers and contracts-all of them had some sort of contingency. Many had home sale contingencies. Sometimes they work out and sometimes they don't. But there's no reason to fear one-from either side. If someone found your home to be the best of the bunch and you ultimately you both agreed on the price, a home sale contingency can be a huge asset to a seller if you think strategically.

Chances are the offer you might accept-in today's environment-will be below your asking price. A properly written HSC (home sale contingency) will include a first right of refusal period. You are not going to take your home off the market-you want to get a back up offer if possible-hopefully better than the first offer. So you want the shortest period of time for the FRR to take place. They often come in with 72 hours,not to include weekends and holidays. My suggestion is 8 hours. If buyer 1 knows they cannot perform without selling their home, that should be easy to negotiate. You don't want to lose buyer 2 by making them wait too long. Or they might keep looking and find a new opportunity and withdraw their back up offer. If buyer 1 might qualify to buy the home-or you can encourage them to, I suggest a little longer period between 24-48 hours max. If they do their homework and seek lender approval beforehand that too should be easy.

My second suggestion is an immediate price reduction on the listed price. Remember you still want to sell the home, and you want to encourage another hopefully better offer. If not better in price,maybe better in terms. You've already arrived at the mental state of what price might work. Both for the market and yourself. Assuming contract 1 is below your asking price, why not drop the price to halfway between your original listed price and the offer you have accepted. You have nothing to lose-you have a contract with someone already. Should the price reduction get another buyers attention, and they know you already have a contract, they are likely to try to compete with that offer and make theirs better. You already know what that contract entails and they won't. So your negotiations with buyer 2 are geared toward something better than what you know you already have! If you can getter better terms (close faster,no HSC,no home inspection,etc.) and bump the first offer out of the way you did well. If the resulting offer is not better, just by having it may be enough to get buyer 1 to remove the HSC and or meet some of the terms of offer 2 to keep their contract on the table.

There are a lot of if's and what if's when dealing with negotiating and the strength of your REALTORS® ability to guide you is extremely important. Negotiation is all about getting someone to do something you want. Is it give and take? Absolutely. You'll almost never get all the honey with attracting a few bees. But how you react to the bees is the difference. If you have a strong,experienced REALTOR® working for you you will get the right advice. Listen to them, not your friend or relative that's bought or sold one home. If you have an strong,experienced on the other side and you don't all of this will sound a little far out!

The opinions here are Jim Mellen,REALTOR,with RE/MAX Peninsula at New Town,All rights reserved and copyright protected MAY 2010.

I've gone down this path before and find myself doing it again after another frustrating week of showings,feedback,lack of respect for the seller and buyer and just plain misinformation.

If your REALTOR is not concerned with wasting their time, how concerned are they about wasting your time? In our area betwen Williamsburg and Virginia Beach VA, we have two MLS systems. From a consumer standpoint this might not appear to have a big effect on on you but it is HUGE!

REALTORS and real estate agents have to belong to an MLS system to post their listings and get the most complete information to help you locate your next home. The MLS costs us money every month. If you belong to two, the cost almost doubles. Belong to three-it triples. So an agent or REALTOR who might be pinching pennies, chooses not to join one or the other. That's fine, until you call them and want to see homes for sale in Williamsburg, and they live in Hampton. You do want to know their areas of expertise don't you? You do want to know that they have access to ALL of the homes for sale in order to narrow down your search and help you find the perfect home if it is out there right?

Well they probably aren't telling you, and you don't know enough to ask. I want you to know there is a problem in our area. Only about 25% of Williamsburgs (WMLS) listings apppear on the tidewater MLS (REIN). So if you are working with a REIN agent looking in Williamsburg, they will only show you what they can find in their MLS, unless they belong to both. So you need to ask that question of your agent/REALTOR! Likewise, a Williamsburg agent may ot belong to REIN but I can tell you that the majority of the full time full service Williamsburg agents I know, do belong to both.

We have different lockboxes to secure our listings keys. This is another huge expense as we need separate lockboxes and keys to open them. With any luck, in the next ten years the entire MLS model will adapt and become more consistent for all of us as consumers and REALTORS/agents. 

Please qualify your agent/REALTOR. You are making a huge investment when buying. Whether you are working with a brand new agent or one that's done hundreds of transactions you expect them to have the knowledge and tools to promote and protect your best interests. It is far too easy to get a real estate license with no apprenticeship or experience requirement, so interview more than one. If you are going to work with a relative or friend who just got their license to help you buy or sell a home, you might want to ask that they work alongside with a more experienced agent while doing so. Both of you will benefit!

I've been getting a lot of showings on my listings recently, but when (and if) I get feed back from the agent, I'm hearing things that concern me. A home that clearly is listed with 3 bedrooms, gets shown to a buyer NEEDING 4 bedrooms. A home that is 6 or 7 miles from Colonial Williamsburg, gets feedback that it's too far away. A 7700 SF home gets feedback that it's too large and doesn't offer enough storage.

My question for buyers reading this-and I'd like your feedback-is this: are you asking agents to show you homes that do not meet your basic criteria, or are the agents dictating which homes to show you?

The MLS systems-and there are several providers used by various associations-are very complex and offer a multitude of ways agents can search for homes. If you are on www.REALTOR.COM or www.REMAX.COM or www.HOMES.COM you can only search basic information-price,bedroom count,area etc. But your agent can most likely find you homes that have granite countertops, hardwood floors, two fireplaces,3 car garages,cul de sac lots, and the Matthew Whaley elementary school zone. All of a sudden, you are not looking at 100 homes, you may find 2 or 3 that have exactly what you want. My MLS portal allows you to search some additional criteria-Jim's MLS portal. I can add additional criteria, but what I have seems to address what most buyers have been asking me to find.

I guess my question is, are you asking agents to show you everything in a certain price range, or are you asking them to help you find specific criteria. Are they asking you what you want in a home? Are they showing you homes on the MLS first to narrow down your search or save you some time? If your agent isn't concerned about wasting their time, how concerned are they about wasting yours? 

With additional photos,virtual tours,videos we should be able to show you the homes you don't want online so that when we go out to actually see some homes, we have some real possibilities. What do you think?

It's been awhile since I wrote anything on this blog, and a couple of months since I've written on some of my others, but I wanted to make sure to pass on some recent observations about buyer and seller behavior I've been witnessing.

First and foremost, if you haven't heard, the last 24 months have been pretty bad for sellers hoping to sell fast, not to mention-close to their "wanting" price. I say "wanting" because that's usually a sellers starting point before you get to the asking price, then begging price, then the give it back to the bank price.

Buyers, during this time have been a little reluctant to commit to a purchase. They also have a price range. The buyer usually starts with a "wanting" price, then an offering price,followed by the "that sellers on drugs price but my wife really likes the granite countertop so we'll offer to steal it price".

What I've noticed recently though is that buyers-some-have waited a little too long to get started. Ive witnessed 3 or 4 homes in the last week that buyers wanted to write offers on, hesitated, and now that they've decided to write, have found out someone already did and the home is no longer available. Awhile back I pointed out that while there are a lot of homes on the market, there are few disirable ones.

If you are a buyer and have looked at 20 homes and only found 1 that was desirable, so did 20 or 30 other buyers. If you wait to write the offer, chances are you will be competing with hopefully only one other offer. You might find yourself completely out of luck. If you are looking at a short sale or foreclosure, you are likely to find out the sellers have submitted one or more offers to the bank already. You might be competing there as well.

Sellers are getting offers more frequently again, they are certainly having more showings which makes them more optimistic about their chances and they will be less likely to "give" it away.

Interest rate increases are still an unknown. Certainly they've only gone up in the last six months and are likely to continue their climb. The government will discontinue buying MBS in March, Fannae Mae and freddie Mac will tighten credit and lender standards further and FHA will be hiking PMI rates. Affordability will diminish at the same time demand increases. The end result may be that sellers will have to price their homes properly and perhaps aggressively in order to sell. Perhaps they will just stay put and wait for the next correction. If that happens, supply will diminish, demand might stay the same or taper off a little. But the reduced supply will most likely create competition once again.

If you think it's hard to give a seller or buyer the right advice, you're right. What I tell buyer A may be totally different than what I tell buyer B. Likewise, seller A may have a drastically different situation than seller B, so their advice will be different even though the market for both is the same.

The bottom line? Follow your REALTORS advice. Be honest with them about your needs and situation. They will help you make the right call. Listen to the national or even local media, but do not think they are more reliable than your local REALTOR.

Jim Mellen,Licensed in VA,RE/MAX Peninsula at New Town REALTORS. All rights reserved Feb 2010

In today's market, here in Williamsburg and James City County Virginia as well as the rest of the country there are many homes on the market. That is reality. However, many of those homes may not be what a buyer may be looking for. Homes are unique, every single one is unique. Even in identical units there are subtle differences in colors, materials, views etc. The trick is to have the most appealing home, with the best views, in the best condition for the best price. Hardly an easy task for a buyer or seller!

When I start my conversation with a buyer prior to getting in my car and driving all over town, I simply ask what a buyer wants in their next home-what are their expectations. I try not to let price enter too much in the decision until I find out their needs, then their wants, then their price. A buyer needing five bedrooms shouldn't look at homes with three. A buyer needing three can certainly look at homes with five.

The list of things a buyer may actually NEED in a home are fairly limited. They might include:

• Bedroom count
• Proximity to public transportation
• Bathroom count
• Bedroom location,ie needs a 1st floor master bedroom
• handicap accessibility-could be a need now or want available for later
• Price limit

However the list of wants is almost endless. Wants are only limited by price and availability. I want a brand new 2010 cadillac CTS, but I only have $10,000 to spend. I can get the Cadillac CTS, but it might have to be a 2006 model with 50,000 miles on it! But, I don't NEED a car, my old one is perfectly fine. Will the car dealer cave in and sell me a car at my unrealistic offer of $10,000 just because they have lots of cars to sell-hardly!

Going back to homes for sale-sorry.....when I look at over 1700 homes for sale in my local MLS, and start whittling it down to certain criteria:

• Five Bedrooms
• First floor master
• Three bathrooms
• 1/2 acre
• no more than five years old
• in the Jamestown high school district

Now I only have THREE homes to choose from. Now I can look at price to see where my options are. These 3 homes are $539,000, $579,000, and a whopping $2,250,000. A buyer limited by a $300,000 price range is completely out of luck. Now they have to work backwards on their criteria. Sacrificing their needs-we haven't even touched on the wants at this point! So you can't do less than 5 bedrooms-you've got 6 kids and two adults to hide in the house. You can live with an older house, in a different high school district so start there. Working your way back to your price limitation. Options do open up for you as long as you are realistic and understand your needs vs wants.

All too often, agents eagerly jump in their car to start showing buyer homes without ever having a "reality check". I don't think I am doing a buyer any favors and possibly doing a disservice by not knowing what they need and what there threshold for disappointment will be. I hear agents showing buyers 50 and 60 homes. Only then to find out they can't find what they are looking for and they. Not surprising, they never had the conversation first.

Going back to my reality check with my buyer scenario above, these are the buyers NEEDS and available options today (08/04/2009):

• Five bedrooms
• James City County somewhere
• First floor master
• three bathrooms
• under $375,000

How many homes do we have available now? Do we have fewer choices or more? We have 0 homes now-back to the drawing board with criteria! 

The point is, this particular seller has little competition. So are they still in the same "buyers market"? Hardly-they are in a sellers market. Low supply, high demand. Do they have to negotiate the same as a seller that has 20 homes competing with them? Hardly. Are they motivated-most likely and they will negotiate. But don't show them an offer $125,000 low thinking you have the upper hand because the market in general is a buyers market.

I hope this exercise in reality helps you in selecting an agent truly looking to save you time and aggravation, and best represent you as a true Buyers Agent!

As a REALTOR in Virginia nothing would make me happier than to see everyone be able to buy a home, or stay in their home. It’s heartbreaking to see someone struggling to make their payments on time and needing to sell but unable to get out of a house they bought within the last three years. Either because the buyers can’t qualify or today’s value is below their mortgage balance.  A lot of this blame has to fall on the lenders who bent the rules and made it possible for people to “overbuy”. Of course there is sufficient burden on the borrower that "stretched the truth" on their application, or the lender who facilitated or suggested they could.There should be no rescue for them. Irresponsible people will always blame someone else for their problems and look for the easy way out.

I am adamantly opposed to any kind of write down in the mortgage to get their debt to equity down to 31%. Especially when the write down is funded by the 95% of the honest, moral and hardworking people who are struggling to meet their own obligations. There are several considerations to keep in mind when toying with this latest proposal. 1) What happens when the borrower finds the market rebounding and decides to sell in a few years. Who will reap the rewards of any gain? We see time and time again communities create affordable housing opportunities, but as soon as the prices go up, so does the for sale sign. I see the banks as getting a windfall. They wrote the mortgage, cashed the check and spent it, now the buyer gets to write down their mortgage to lower their monthly payment to an arbitrary 31% of their income. The only loser is the American taxpayer who is trying to do the right thing. 2) what other debts might be causing these people to not afford their mortgage? Do they have brand new cars or a boat in the driveway as well? Do they have brand new big screen TV’s and stereos throughout their house and a $7500 line of credit that’s maxed out at Best Buy? Did they take out an equity line to pay off credit cards only to run the credit cards back up? I have a daughter in college, a son heading there in two years and I'm driving older paid off cars. I don't take vacations and I have a job that I don't draw a weekly or even monthly paycheck for doing. Yet I seem to be able to make ends meet and at the same time spend what money I do have left for on my buyers and sellers to make their life better/easier. Thousands of REALTORS are doing the same thing and not standing in line for a hand out. The ones who are, unfortunately will be getting out of a very rewarding career that just wasn't suited for them.

I am sympathetic to the layed off workers or victims of corporate downsizing. There is a need to provide assistance to these people. But there is also a way to find these people. These are not people who have been on welfare or unemploymeny for the last 2 years. These are not illegal aliens already getting assistance with health care, unemployement,housing and any other subsidy normally reserved for legal residents. There has to be a systematic and reasonable effort to find out how much people are behind on the mortgage and why. Simply a reduction in value CANNOT cause anyone to be behind on their payment and should not be considered.

I believe the housing debacle can be fixed for far less money. It will hurt, no doubt. But if we loosen the rules for investors to invest in some of these properties, there will be a great rental market for all of the people unable to afford their current obligations. If the government allocated more than 7% of nearly $800 billion toward housing (grouped with transportation), we would have some confidence in the housing market. We can’t simply make it easier and penalty free for them to stay in their home without risk.  We have all bought declining assets all of our life-cars,clothes,boats,timeshares-nearly everything we buy is a declining asset except our home. While a home should be something everyone strives to own, it’s not a guarantee or a right. It has to be earned, and that comes with responsibility and some risk.  

Jim Mellen

I find it amazing that so many average people with normal intelligence and perspective can see that this stimulus package is nothing more that a big fat liberal IOU that will never be paid back and more than likely will be just the beginning. Yet the experts, PHD's and industry professionals that were were around while this economic crisis was building, were and are responsible for fixing it.

The general consensus is that the housing industry is at the root of the problem and solution yet more, much more is being spent on health care, new governement agencies and creating a few million jobs-perhaps-over the next several years. They want to build roads again. Is the out of work wall street exec really going to put on some Timberline's and Carhardt's and lay some asphalt? If the housing crisis is at the root, don't you think it should be getting the most water?

$1,000,000 would pay 20 people $50,000 a year

$100,000,000 will pay 2000 people $50,000/year

$1,000,000,000 will pay 20000 people $50,000/ year

$880,000,000,000 will pay 1,760,000 people $50,000/year.

That is a lot of money! Now, if 10 million homeowners were behind $20,000 on their mortgage the price tag would have only been $200,000,000,000. And I doubt that there are 10,000,000 homeowners behind $20,000. Sure there may be some that are more behind, and some less behind but nobody has asked the banks to provide a number. Perhaps the banks want to continue perpetuating the myth that is is more dire than it might really be.  How hard would it be to get a number for the amount people are behind? Why has it been so hard to ask?

Now they are considering restructuring peoples mortgages. What will happen when the homeowner sells in 3 years when the value shoots up not over the reduced mortgage amount, but from todays value. Who will get the profit, the reward. Will it be the bank, the government or the homeowner who reduced his risk that gets the reward? For all of the hardworking, struggling homeowners working more than one job to honor their commitments any subsidy or rewriting of a mortgage will be a slap in the face and an open invitation to people to stop honoring their commitments and get in line for the government hand out.

When all this free money disappears the problem will still be there. We can't give the money to the states for infrastructure spending because they have been as irresponsible as the government and the homeowner who over bought.

There is no guarantee in life, there is no reward without risk. The liberal agenda has always been that there is a guarantee and right to have everything your neighbor has. We are heading down a slippery slope that is getting steeper and steeper. The bottom of the slope is now a nearly $12,000,000,000,000 deficit or somewhere near $40,000 for every breathing american assuming there are still only 300 million people living here. I'll give the government my $40,000 if they let me keep all of my income and let me take care of my family and security myself.

With $800 Billion, the government could by Microsoft, Apple, Google, Circuit City, Bank of America, Sears, Home Depot, Lowes, and probably every car dealer in the country and still have a few billion left over. Seems like a good buy and they could actually stimulate the economy-as long as we don't let the government run them. Let's find some high school graduates and a few college drop outs to run the economy. I'll bet it gets run better!

I did a search of the MLS for the last 45 days looking for how many price reductions have been posted. It seemed alot of my recent inbox emails have been from agents announcing a new or lower price on one of their listings.  This is not uncommon and a good way of getting the word out and hopefully read!

The market continues to change everyday, one day good news, later in the day bad news only to be followed up with a different twist offering good news or renewed optimism.

Anyway, almost 20% of our active inventory witnessed a price reduction in the last 45 days. I know for a fact-because I was a party to it-one had a price reduction taking it below the point I had written an offer months earlier. Why? I continue to offer sellers proof that quite often, your first offer is often your best, do not let pride get in the way, and leave the emotions at the door. It is simply a business transaction-look at the bigger picture!

There's no way to prevent the need for the occassional price reduction. It happens at the grocery store, the gas pump, and the department store. The assumption is the house was overpriced. A home is priced for the current market conditions based on past verifiable information and future optimistic projections. If I hope to sell a home within 60 days, I have to look at the absorption rate. How many similar homes are on the market and for how long have they been on the market. If my market time for a $300,000-$325,000 home based on current inventory and tracking is 18 months, why would you want to price it at $320,000? Price it at the bottom of the range today. Don't wait 6 months and do a price reduction (or three price reductions!)

Pricing a home is tough. It's your home and your biggest investment. I want you to get as much as you can for it as quick as you need to sell. But if you get a buyer who as written an offer at 90% of your asking price, perhaps you want to think it over long and hard before rejecting it or countering back at full price.

It's often written,blogged,speculated that Real Estate agents are only in it for the money, and don't care-just in it for a paycheck. Unfortunately, until you've dealt with an agent for sometime, written or received a few offers that haven't worked out do you know the true character of your agent. Perhaps a little more trust and communication is all that is needed! And work with an experienced full time REALTOR. This is not the market to hire your best friend who just got their real estate license!

Savvy buyers and investors are always looking for "the deal". They want to buy low and sell high.  Who doesn't? A short sale, pre foreclosure is one way of getting a good deal on a house, most likely below market value.

A pre-foreclosure or short sale is one where the seller of a home is trying to get out from underneath a crushing mortgage, prior to losing it in a foreclosure.  A foreclosure will have a far greater impact on your credit score than a short sale, so it is the best option for people heading for big financial trouble but not quite there yet. A short sale is one where the lien holder accepts less than what is owed to release the deed/deed of trust.

There are numerous things to consider when looking at these homes. More often than not, the process has been started long before you see the listing online. In order for a seller to seek short sale approval, the seller will need to get in touch with their lenders short sale or loss mitigation department and complete a "work around" or hardship package.  This will give the lender an idea of why the situation has developed. Included with the package is a request for a pretty in depth financial disclosure. Where does your money come from and where is it all going. You'll also need to provide them with a hardship letter. It's tough to concede you may not be a good saver and spender-especially having to document it for a stranger.

That's the first part. Then you'll need to provide them with an offer to buy the house, including a HUD1 statement detailing the closing costs for both the buyer and seller and a net amount to the lender.  This is a critical step in securing a short sale approval.  A lender will obviously want to break even, but may be willing to accept a loss. How much of a loss depends on a myriad of factors including the lenders tolerance for loss.  The lenders want to clear up any "bad debt" as quickly as they can so they can continue to receive "new" mortgage money.

For a buyer of short sale property, the two things you need are patience and patience!  Lenders are not a ready and willing seller in the traditional sense. There may be several departments and people involved in the approval process. Banks are different than Realtors.  They don't like to negotiate, they may not be the best communicators, and the information they need and want sometimes requires a little mining!  Lenders are not emotionally connected to anyone involved or the outcome.  While you may think you are doing them a favor by taking the "bad debt" off their hands, the debt individually is not a significant factor in their portfolio.  They may have millions of dollars in bad debt they're sitting on. Do you think the $10,000 or $20,000 the seller is behind really affects them? Not too much.

Buying a short sale is a great way to get a house below market value, but it's not for everyone, and not every Realtor is adept at handling and negotiating the process on your behalf. Ask for referrals before spending a few months on the process with a Realtor who does not fully understand the process.  Like anything else, experience matters.

There is lot's of interesting talk online from consumers and agents alike as to whether you need a REALTOR to assist you with the sale or purchase of REAL PROPERTY.

I may be one of the few REALTORS who will tell you no, you don't! But be prepared. In most cases, the unrepresented seller is unaware of all the things a REALTOR actually does. It's not as simple as placing a sign in your yard or holding an open house.  You actually have to comply with many of the same laws and disclosures I do. What you don't have to be is ethical. But don't expect the other side to be ethical either-unless you have a REALTOR bring you a prospect. If you're fortunate they'll also bring you an offer, but will ask you to pay their buyers agent fee so they can negotiate against you-and you'll probably agree to pay it!

And there are costs. Call your local paper and ask what a display ad costs. Even the classifieds can be costly. And guess what? They want to get paid upfront! Design and print some nice flyers and brochures, maybe get a website, or pay an internet company to get it listed in the MLS-for a fee up front. Then if you're lucky enough to get an offer, you might want to have a lawyer look over the contract before you sign it-that's right-pay up front! Start adding up the costs. If you're paying the buyers agent fee and some of the fees mentioned-you're going to spend almost as much as if you had listed it in the first place-and you only found 10 percent of the buyers who might be in the market!

And there is safety. Go ahead, advertise your home for sale, let a stranger in. You can trust them.

And there is convenience. A buyer will want to see your home when it's convenient for them. That may mean 10am or 7pm. Maybe Sunday morning, when you're planning to go to church. Be prepared to sacrifice your schedule. And guess what? The buyer may call to rechedule or cancel after you've adjusted your schedule!

A buyer looking to buy without a REALTOR also has to be prepared. What you see online, even at REALTOR.COM may not be complete information. Are you going to only look at homes that are not listed with a REALTOR to save money? Guess what-those sellers have priced their homes usually higher than a REALTOR would list them. Sure you can negotiate closing costs, but will you really know if you are paying too much for the home? And did they disclose everything they know or should have known? Sure you can use a boiler plate contract-but does it have all the elements written in to protect you? And you'll want a lawyer involved for sure to oversee everything-please pay prior to service rendered!

It's all about compromise. You will in most cases get what you pay for or in all cases-won't get what you don't pay for!

Let me say this first-the market is great to buy or sell a home. As long as you HAVE to buy or HAVE to sell.

One of the things I am beginning to ask my seller and buyer clients is "are you financially and emotionally ready to buy or sell your home TODAY?". Perhaps I should have been asking this a year ago. I might have saved an awful lot of money throwing good money after bad in a market for sellers who simply were not in a "have to sell" situation. Perhaps with my buyer clients I might have been able to save enough time and gas money to build a new workshop at my house, attended one of my daughters swim meets or coach a little league team.

My estimate is that 1/3 of the sellers in my market do not HAVE to sell. They may want to if they get their price or they may need to if they want to buy an investment property somewhere, move closer to family or downsize-but they still don't need to. The seller relocating for work, the seller who is divorcing, the seller who has a lender beating the door down for the last 3 months mortgage payments-they NEED to sell.

If we remove 1/3 of our inventory, we will be in somewhat better shape.Then, price your home to sell NOW. Look at your nearest competition, how long they've been on the market and price it better. Base your home on current listings not SOLD listings. The value you of a house and the price it sells for may be two different numbers unfortunately. I firmly believe the homes I am marketing are priced at or below market value. But they haven't sold or we haven't received an offer so what do I do next? Adjust the price or the incentive to get a buyer or an agent to where they HAVE to write an offer. It's not a matter of marketing trust me. I've spent thousands of dollars marketing homes that haven't sold, and worked with many buyers who never bought. I've made mistakes, and I've learned from them. I turn down those listings now before throwing my money and time away. And I interview my buyers carefully to make sure we are a good match.

Next we need to weed out the buyers who don't HAVE to buy, or are not financially and emotionally ready to buy. I hear agents talk about showing people 50 houses, and not finding a single one they like. Or the buyer says "I like the bathroom here, the yard there", or "I love the house but it's not on a golf course". Showing 50 houses is a waste of a buyers time, the sellers time, the  agents time. If you want to buy a house on a golf course-look at homes in a golf course community! Then there are the buyers who say I want to look at homes in the $100,000 to $400,000 price range. Guess what? You won't like a $100,000 home after seeing a $400,000 home. And you probably won't like the $300,000 home after seeing the $400,000 home either.

Get yourself financially ready first. Know your comfort level and stay within it. Every market in the country has an abundance of choices. You won't find the perfect house-it's not out there. You probably can't even build the perfect house. You will repaint or wish you had done this or that differently after you move in-I promise. The financing strategies change every day it seems. If you're not planning to buy for 6 months-don't bother looking for 6 months. When you are committed to buying-jump in feet first, find a house you can MAKE a home and make an offer.

Next, you need to find a professional,experienced and successful REALTOR to help you when you are ready. Working with your best friend who just got their real estate license may not be the best avenue to take when selling your home. Likewise when buying your home. I don't begrudge anyone looking to be self employed in what I feel is one of the most gratifying jobs out there. But, there should be more emphasis on training when it comes to new agents. And for some experienced agents I might add! Would you trust your 16 year old with the keys to your brand new Mercedes? Inexperienced agents are filling real estate companies across the country. It's not that they are taking business from me-trust me they're not-it's that they don't know ANYTHING about EVERYTHING that can go wrong-and their job is to promote and protect your best interest. Real Estate schools teach you to take the state test to become licensed. They don't teach you enough about actually practicing Real Estate. Your hairdresser spent over 1200 hours getting licensed to do your hair. Your brother or sister in law who just got their real estate license took 60 hours. How scary is that!

Jim Mellen, Licensed in Virginia
Liz Moore and Associates. The views here are my personal views and not meant to offend anyone!

The Code of Ethics and how well we understand it and explain it, is the difference between dealing with a REALTOR® and a Real Estate Agent.

Confused? That's because very seldom is it explained or talked about except among REALTORS®. ALL  Virginia Real Estate Agents have to be licensed in the Commonwealth of Virginia, and can act in a number of various roles to help you buy or sell Real Property anywhere in the Commonwealth.

REALTORS® are those agents that belong to the National Association of REALTORS (NAR) and agree to adhere to a strict Code of Ethics. There are 17 articles which define the duties we perform. Real Estate agents are those licensed individuals/brokers that have chosen for whatever reason, not to join the NAR. Membership is voluntary. To that end, Real Estate agents may choose to any of the articles during the course of their business, but do not pay dues to the NAR, thus cannot be held accountable when they fail to adhere to the Code. They cannot identify themselves as REALTORS®.

The first article in the Code is to promote and protect the interest of the client-that person who has engaged our service. That single commitment is paramount to your satisfaction and understanding that your interest come first. The remaining 16 articles have to do with duty, obligations, between agents,brokers,the public and the governing bodies of the NAR and local Real Estate Boards.

Make sure you know who your trusting your single most important asset with.

For more on the Code and to see all 17 article please refer to this site www.JimMellen.com/ethics

Over 80% of home buyers start their search online. They are looking for listings with multiple pictures and virtual tours. They do this to save time and rule out the homes they don't want to see. Think about it, virtually every major purchase you make starts with research. You probably didn't walk in to Best Buy without looking first at your options online for that big screen TV online!

Sellers have wondered whether too many photos or a virtual tour give the buyer a reason not to come see the house. I say yes it does. The buyer who does not like your home in pictures, also won't like it in person and will have wasted several people's time. But the person who does like it, will be more likely to make an appointment.

Giving buyers a good idea what to expect saves the buyer time, saves their agent time, saves the seller time by not leaving the house 12 times a day so buyers can stalk through your house and say they hate wallpaper, or wanted a well lit family room only to find a cave. More importantly, look at your competition online. Does your home look at least as good as what you see for sale? Guess what, it has to look better! Remove clutter from all your flat surfaces. No mare than 3 things should ever be grouped together. Have a table with 40 family pictures on it? Clear it off and display your favorites-but only a few. Since you're planning to move soon anyway, go ahead and start packing. It will save you time later and make your home more attractive. Treadmill in the master bedroom? You HAVE to get it out of there! Here are some other tips:

• Replace light bulbs that don't work and use the brightest bulbs the fixture will tolerate.Better lighting is a huge asset!
• Make your entrance shine. Keep the grass cut and clean, pressure wash and paint the porch,door,shutters etc. Buyer today don't want to have to make that their first job after moving in.
• Have the lights on when a showing appoint is scheduled. The agent should turn them off when leaving unless you leave a note otherwise
• Have a showing feedback or guest book on the counter asking what the buyer thought of your home. Yes they may be judgemental and you may not agree with what they say, but they're telling you how to sell your home-if not to them, to the next buyer who comes through!

Virtual tours and multiple pictures will be what possibly sells your home. Now that you've cleaned everything up and did (almost!) everything your agent asked, make sure they get the best pictures and virtual tour online so the world can see it! Not everyone takes good pictures. When your agent shows you how your home looks online, you'll know if they took good or bad pictures of your hard work. Sometimes, a professional photographer can make the rooms look brighter, bigger and better. That will help you stand out and above your competition.

As a virtual tour photographer in the Hampton Roads/Williamsburg area, I've taken thousands of pictures in hundreds of homes. Circlepix Virtual tours are among the best online and I've joined them in providing hundreds of areas virtual tours in the area for a growing list of Realtors. Take a look at some of my work at www.Circlepix.com/agent/145783 and see if these don't look better than many you come across online. Are youa "FSBO"? I can do them for you as well and as a licensed,successful Realtor I can also give you the advice you may need to get it sold.

Jim Mellen, 757-810-3642, Liz Moore and associates, lic. in Virginia

Circlepix Virtual tour photographer for hire!

Buyers have been saying for 6 months or more "I'm going to hold off on buying until the bottom hits". Guess what, the bottom has come and gone. While there are still countless motivated sellers who will make a deal, the buyer has to initiate the deal! And while the buyers have been waiting for the sky to fall, the mortgage market has been changing your plans and you may not be paying attention!

Lenders and the two major providers of mortgage money-Fannie Mae and Freddie Mac have been rewriting programs, guidelines and standards, making it tougher to qualify for a mortgage, as well as more expensive.

Many home buyers and consumers I hear from have totally confused the fed rate cuts with the expectation of lower mortgage rates.  The opposite is true. While the lower short term borrowing rates help revolving credit and may stimulate spending, they stimulate the stock market. Those 200 and 400 point gains recently have a negative effect on the bond market which is where the mortgage market does it's business! So while you've been waiting for the bottom to fall out, mortgage rates went up 3/4 of a percent and your qualifying rules have drastically changed. So now you may not be able to afford the same house you could have 4 months ago. Do you want to take that chance to see what's going to happen next week?