About a week ago, I sent a copy of my book, Create A Great Deal, the Art of Real Estate Negotiating, to a woman in Australia. She must have passed the word around, because I just got an order asking for the immediate shipment of 10 copies and an additional purchase of 100 copies. Most of my sales are to readers in the United States and I have sold a lot of the books in Canada However, this is such fun to have Australia get excited about it.
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My latest article with Inman News just came out. When you negotiate, do not gloat over your victories. Instead, make the other people involved fee that they did well. Point out every concession you make so that they can value the victory that they accomplished. When they feel that they have gained something, they will be more willing to let you gain something in return. To read the entire article with stories about my clients, go to http://tinyurl.com/pyd6aqo
Too many acronyms, right? CRS is the Council of Residential Specialists, an organization where only the top Realtors qualify for membership. They have a rigorous review process to select certain Realtors as Subject Matter Experts, which they designate as SME. As you know, I wrote the book on real estate negotiating, so they asked me to be considered for this designation. I am happy to report that they designated me as a negotiating Subject Matter Expert. So, if you need someone with negotiating skills, please to go www.NegotiatingConsultant.com and I will be happy to help you.
It is important for a Realtor to have reviews, so a potential client can see what the experience of other clients was. However, written reviews are limited in their ability to convey the full impression of the writer. In a video review, the viewer can get a sense of the person giving the review. If you want to try it out, look at this review by Sarah Kirwan who describes her experience with our Team in a sale where her father died after the contract was signed. https://www.youtube.com/watch?v=7qnIVutudE4 . Which do you prefer, written reviews or video reviews?
You can become frustrated making offers on properties that have multiple offers. If you do not win the bidding war, your client does not get a home and you do not get anything. The five top tips start with learning the most important thing about the situation: how many other offers are you competing with. If there are a few, you offer a good price. If there are many, many offers, you offer an amazing price. Second, try to find out if there are any terms where you can win on something other than price. Third, before anyone else gets to the property, try to get it under contract to avoid the bidding war. Fourth, consider an escalation clause to offer more than any other offer. Last, if you lose, see if you can tie up the property with at back up offer. For all the details, look at the article in Inman News.
Since I wrote the book on real estate negotiating, Inman News has asked me to write for their online newspaper about negotiating, with an article on how to represent a seller who is receiving multiple offers. The five top tips start with looking for the best buyer, who may not be the one offering the best price. Next, make sure that the buyer you select cannot renegotiate the price after you sign the contract, mainly by using the appraisal. Tip three is to make sure that the successful buyer who pays top price is going to want to pay the seller back later in the transaction. The agents make a difference in which buyer is selected, as the ones that are professional and good to work with are more likely to get selected. For all the details, the article is at http://www.inman.com/2015/08/18/5-tips-for-picking-the-best-buyer-among-multiple-offers/
There have been so many false predictions of the recovery of the real estate market that every bit of good news is greeted with scepticism. Oh, yeah, hurry because it is going fast! As a result, many buyers are sitting there being sceptical while the market takes off and leaves them behind. Or, they could look at the numbers and react to the reality while there is still time.
Across the nation, we used to have many to many homes for sale compared to the number of properties that were actually purchased. If the sales continued at the same pace, it would take years to work through the inventory. Now, ProTech Valuation Services May Home Forecast shows that there is a 6.3 month supply of homes for sale. That means that if sales continue at the same pace, the current inventory will be sold in 6.3 months. This is the lowest level since 2006.
All real estate is local. In Raleigh, Durham, Chapel Hill and the rest of the Triangle, the inventory is down and the number of sales are up. As a result, the prices are starting to rise.
I enjoy the buyers agents I deal with who try to justify their outrageously low offers for homes in Raleigh, Cary and the Triangle by trying to reference the poor real estate market. That is about as believeable as trying to convince Mrs. Lincoln that she and Abe had a wonderful time at the play at Ford's theater.
The market still has some areas that are slower to recover. However, the numbers show it is starting to change. So, you should change to keep up with what is happening now.
The more Short Sales in Raleigh, Cary, Wake Forest and the rest of the Triangle area of North Carolina the fewer foreclosures. Every Short Sales is one less foreclosure. I hope we can do the same in every neighborhood in the United States. My method to spread the message is to send a video to my friends, neighbors and clients asking for them to help save their neighborhood from foreclosures. I hope they tell anyone they know who is in trouble about short sales. I used this video http://www.youtube.com/watch?v=LBRaB6U_PTE on YouTube. There are a lot of people in trouble do not know how much Short Sales can help them out of trouble. Without this knowledge, they let their home head toward foreclosure. For certain people, the video gets a better reaction as it presents the information more personally than my Short Sale website www.ShortSalesR.us . The Short Sale website works for the people that prefer to study Short Sales in detail. On the other hand, the video provides a face to face presentation. The new short sale procedures are easier and faster, so they work better. If you tell anyone you know who is in trouble, the real estate market will improve more quickly and America will recover faster. Thank you for helping.
Raleigh's Downtown has gone through a renaissance with the creation of the Convention Center, new hotels and my favorite spot, the Raleigh Ampitheater. It is a small outdoor venue that takes advantage of Raleigh's southern weather. Preferred seating is in chairs close to the stage while at the back there is an elevated lawn where you can spread out your beach towel. There is not a bad seat in the house, as it is an intimate venue. The Ampitheater is in easy walking distance of more than a dozen restaurants from Italian to Barbecue. The site has all the parking for the convention center, with three major lots within a couple blocks, so getting in and out of the Ampitheater is easy. Judy and I went to Tuscan Blu restraunt in The Depot nearby and just walked from there. By the way, Maurizio Privilegi, the owner of Tuscan Blu, is delightful with his Italian accent and wonderful stories. The Beach Boys were playing at the Ampitheater, the perfect music for this aging surfer who grew up on the beaches of Southern California before moving to North Raleigh in 1996. Since many people have relocated to Raleigh, I was not the only aging surfer who moved to the Triangle area. However, I was surprised that most of the audience was young as they danced, sang and cheered. Here is a video of the performance that shows the PNC Center with its condos on the upper floor (the tall tower with the pointed antenna), the Progress energy building (taller brown building) and the Convention Center with its high tech mural made of LEDs. The Raleigh Amphitheater will Get Around, just like the Beach Boys song. Click on the video below and you can watch the beach balls fly throughout the audience. Who is that woman who smiles at the end of the video?
Remember when you could get any kind of a loan that you wanted if you had a credit score of 700? Now, the average credit score for the loans made in the last six months was 750. When you consider that the highest possible credit score is 850, you can see how incredibly high this is. It is even more astounding when you consider that the average credit score required to get a loan increased by 10 points in the last six months. Many people thought that the problem with the real estate market is that the lenders would not provide loans for anyone to buy a home. Now you have the statistics to prove it.
Did you think the credit score was the only stringent requirement? Remember when a 20% down payment was plenty to get any loan. The average down payment for approved loans in the last six months was 24%, which increased 3% in the last six months.
The other factor in making a loan is the debt to income ratio i.e. the amount of your fixed debts divided by your income. For decades, you looked for a "front end" ratio of 28% and a "back end" ratio of 36% to 50%. Front end is household expenses and back end is total fixed debts including credit cards. So, what do you need to get a loan now? An average front end ratio of 23% and a back end ratio or 34%. To visualize this, the total debt of the average approved borrower is about one third of their income. In other words, you need to have two thirds of your income that you can save.
So, with these nearly perfect applicants, the lenders could process them quickly, right? After all, it used to be normal to be able to get a loan fully processed in 30 days. Now it takes 44 days, and the time to get the loan approved increased by 10% in the last six months.
What did it take to get your loan turned down? The average credit score of someone rejected was 699 i.e. one point below what used to give you any loan you wanted. To get turned down, your down payment averaged 17% and your debt to income ratios of 27% and 43%.
The Origination Insight Report by Ellie Mae gives the statistical information needed to answer the question "Why is the real estate market failing to improve even though home prices are low, interest rates are at record lows, employment is increasing and more people are moving to the area?" The asnwer is that lenders are not loaning to mere mortals, they only loan to the super humans.
So, you can not only thank the lenders for getting us into this mess, but for keeping us there.