Real Estate News

You may have heard recently that discussions are currently taking place relative to the further consolidation of our local Realtor associations. Just as we are seeing companies and other service providers right size and merge, our professional trade associations are also exploring ways to deal with the realities of our current economy.

The Metropolitan Association of Realtors (MCAR) and the Western Wayne Oakland Consolidated Association of Realtors (WWOCAR) are seriously considering joining forces to create a larger, more efficient organization. Such a move will create an organization that can provide a higher level of service to you and the public at the same or lower cost.

Interestingly, both the North Oakland County Board of Realtors (NOCBOR) and the Livingston County Association of Realtors are paying very close attention to this and may wish to join the new entity in the future.

I’m certain that many of you now reading this are asking, “So what?” To help answer that question, let me draw an analogy between our local, state and national associations and DTE, our local power company. As we go through our daily lives walking in and out of rooms thoughtlessly turning on and off light switches, using computers, watching television and going to restaurants in air conditioned comfort, we take electricity for granted. But it becomes painfully clear the minute we lose power just how important electricity is, even though we rarely think about it.

So it is with our associations. Not only do they provide important political advocacy that supports our business and private property ownership rights, associations also provide professional standards, training and dispute resolution services for our profession. They are also the shareholders in our primary MLS system which, of course, provides the mechanism by which we share property information among ourselves.

Much like electricity, you don’t think about these things every day, but if we were to lose them, you would feel the pain!

I will keep you apprised of how these important discussions are progressing as we move forward.

Question: I placed my home on a for-sale-by-owner Web site and was contacted by someone who said he wanted to buy it. He provided an acceptable offer via e-mail. The buyer said he would take care of the paperwork and then sent a form asking for legal details about the house and my personal information.

I did not hear back from him. What risk have I taken by providing this individual with this information?

Answer: Your guard should have been up when the buyer made an offer to purchase your home without having seen it. While that does happen from time to time, it’s still rare, and it raises a lot of red flags.

When selling a house, particularly when you are not experienced in dealing with legal contracts, you should hire a professional to help you handle situations like this. Attorneys can provide such help. Realtors are also experienced in legal contracts and can also help with marketing and negotiating strategies, thus handling the transaction from start to finish.

Having a professional on board can help you weed out potential scam artists who won’t want to tangle with those representing you. If you had said, “Joe, thanks for your offer. I’m glad we agree. My broker will call you to discuss the contract and arrange for a good faith deposit,” I’m guessing that you would have figured out before a contract was sent that this guy wasn’t legit.

In general, you should never give anybody any of your personal information when selling your home in this manner. That type of information should only be given to those with whom you have a professional fiduciary relationship.

It’s terrific if you can sell by owner and save yourself the commission. But you should have a solid team on hand who can help you get through the process of selling your single biggest asset. A good real estate broker should be at the top of your list.

The media has been full of information on how to get rich buying foreclosures. Opportunities do exist for investors and agents who want to run a high-volume, low-commission business. But the homes and the opportunities are not as wonderful as the media may lead one to believe.

The process of buying a home from a bank is different than buying it from a private party. It is slower and there is more paperwork. Large asset management departments handle foreclosures. Employees are in charge of “files,” and they have hundreds of them. They get sick, take vacations and don’t answer the phone. These employees play the role of the seller, but there is no real incentive for them to efficiently close the transaction.

Getting these homes inspected is a challenge because often the water has been turned off by the city. The bank has a process and policies, which means it takes longer to get the simple things done that most of us handle on the spot with a phone call.

Often no effort is made to clean bank-owned homes or remove refuse. We have seen unheated bank-owned homes in sub-zero weather. Homes are frequently in disrepair and missing key components. They can be full of surprises that are only discovered after the closing.

Some foreclosures are in better shape than others, but the buying process is almost always cumbersome. . Clients make offers and wait for weeks to find out if the offer was accepted.

It is a myth that all bank-owned properties are a bargain — some are, but many are not. The bank-owned homes that are priced very low often need so much work that the cost of the repairs is more than the value of the home after the repairs are done.

The bottom line is that every property ultimately sells for its market value, based on its location, condition and amenities. Unless one is seeking a real fixer-upper, most foreclosures are not such a great deal.

Weir Manuel’s current inventory of listed properties was 12 percent higher at the end of May than on January 1, 2008. This is notable in view of the fact that inventories of current homes for sale in our marketplace have stabilized over the same period of time.

There could be many causes for this increase in listing market share, some desirable, some not. Those that are undesirable include “buying” additional listing inventory by overpricing and/or a downturn in our sale-to-listing ratio. Fortunately, neither of these is applicable in our case.

We know that the vast majority of our inventory is priced within the “opportunity triangle”. Proper pricing and marketing directly correlate to a high sale-to-listing ratio. Weir Manuel’s sale-to-listing ratio has increased from 28% at the end of 2007 to 32% as of May, 2008.

These factors indicate that our increasing listing inventory is due to better brand awareness combined with superior presentation skills and sales performance by our sales team. In difficult markets we have always experienced a flight to quality brands. We are confident that this is a result of our brand being widely recognized as a trusted source for real estate services and our team of professionals consistently meets the expectations of our clients.