Help, My Neighbors House is an Eyesore!!

You need to sell your house. You love your funky, bohemian neighbors, but their Bumblebee paint theme has your buyers buzzing away. The Bee doesn't exactly reduce the value of your home, but you feel the sting. What can you say to your friendly, nonconformist neighbor without hurting their feelings?

Be neighborly and tell the truth. Tell them that you love being their neighbor. Compliment their creativity and tell them that their house makes you smile everyday. Let them know that selling your home to someone who will be a good neighbor is very important to you. Finally, let them know you need their help to attract a good neighbor.

Although situations like these are uncomfortable for all of us, we have to deal with it. These are obviously "fun" people so make your proposition fun. Ask them if you can host a paint party and invite friends to help out. Let them pick a color that appeals to them, yet is a bit more conservative. Offer to re-paint it back to their original color after you close.

In reference to the bumblebee house, if you were going to make it one color during your sale, which would you go with? Yellow or Black?

Where is the Next Hot Real Estate Market?

With everyone talking about froth, bubbles, doom and gloom, we thought we would find out where the experts are investing their money now. But, where can the average person look to find pockets of future growth in housing?

The website of one of our largest and most valued customers, The Home Depot, offers a look into where the successful company is putting its real estate dollars. As we all know, The Home Depot serves the building and remodeling community. Their real estate investment division spends a great deal of time and money predicting where the next boom in housing will be, before the company invests millions of dollars in a new store location.

Discover where The Home Depot believes the hottest, future building markets in the country are. The DIY experts crystal ball can be viewed at http://careers.homedepot.com/grandopenings

What does $219,000 Buy Today?

With the median, average sales price of a home in the US hovering round $219,000, we decided to take a look across the country to see exactly what $219,000 will buy. In 2004, "the average" house in the US has 4 bedrooms, two and a half baths, two car garage and is approximately 2400 square feet.

Miami, OK: MLS ID#: 05-786 List Price $220,000 4 Bed, 2 Bath 2,148 Sq. Ft. on 2 Acres
Miami, FL: MLS ID#: M993549 List Price $219,000 2 Bed, 2 Bath 1250 Sq. Ft. Condo

Pasadena, TX: MLS ID#: 1442540 List Price $219,000 4 Bed, 2.5 baths 2800 Sq. Ft. Loaded w/ all the ammenities on a half acre.
Pasadena, CA: No homes available. Average sales price for 4/2.5/2 is $1,000,000.

Beverly Hills, MI: MLS ID#: 25092730 List Price $225,000. 3 Bed, 2 Bath. 1442 Sq. Ft.
Single story, Built in 1942.
Beverly Hills, CA: No homes available. Least expensive listing is MLS ID#: 05-034813. List Price $549,000. 2 Bed, 1 Bath upstairs unit in a 4 plex building. Needs updating.
Beverly Hills, FL: MLS ID#: 6105350 List Price $224,900. 3 Bed 2 Bath. 1496 Sq. Ft on 1 acre. Built in 1999.

Las Vegas, NV: MLS ID#: 519180 List Price $219,000. 2 Bed. 2 Bath. 1042 Sq. Ft. on .08 acre lot. 1 car garage.
Las Vegas, NM: MLS ID#: 130566 List Price $225,000. 5 Bed. 3 Bath. 3300 Sq. Ft.

Trivally speaking, I learned that the US loves "Clinton". There are 14 cities named "Clinton, ??, USA".

Houses on Fire!!!!!!!

The National Association of Realtors reports smoking Sales of existing Homes for June. Sales increased 2.7% from June 2004, totaling 7.33 million homes sold for the month. This leaves a 4.3 month of housing inventory on the market. The 3.8% increase in housing inventory is a bit of good news for home buyers. In addition to offering more selection, the increase in inventory will slow down price increases for the near term.

Median Home prices jumped 14.7% year over year to $219,000. This is the greatest increase in home prices in 25 years.

Your regional price appreciation in the month of June was:

• North UP 3.4%
• East UP 1.9%
• South UP 1.1%
• West UP 5.5%

Despite the runup in prices, with mortgage rates continuing to fall over the past few months, it seems nothing stands in the way for another record setting year for real estate owners.

MLS FOR ALL. GOOD FOR CONSUMERS. GOOD FOR REALTORS.

The MLS is a VERY powerful tool for bringing buyers and sellers together. MLS is an easy to use/easy to search collection of all home listings in the country. MLS access delivers gains to all who use it.

The MLS is the engine that drives the residential real estate industry and is responsible for 90% of all housing sales. We have this great tool for creating efficiency. Why block the customer paying for the service from the benefits of access to it??

The MLS collects all home listings for a given region in one place. Having the information in one place, significantly reduces the time buyers, sellers---and their brokers---have to spend gathering crucial, decision-making information. It seems elementary to us that everyone should have and benefit from such a time saving tool. Sadly, brokers view listings as their property, as opposed to seller's, and believe they should have control over who gets to utilize them.

One break for consumers is forming in the MLS bottleneck, the generation of the flat fee MLS listing broker. Companies such as www.why6percent.com, with their network of licensed real estate agents, offer to place a sellers listing information on the MLS for under $500. This service offers the potential of large savings for home seller's willing to do some of the work, such as marketing, showing, negotiation, etc. themselves.

Flat fee access to the MLS is a win-win for everyone. Sellers win because they buy the MLS access crucial to the sale of their home and save money by doing the work. Buyer's win because the MLS offers more inventory and choices in homes, and less selling fee's may mean a cheaper price. A buyer's broker wins because the MLS listing states the seller will pay their commission. The listing broker wins because he is well compensated for simply uploading information to the MLS database. The listing broker also receives the added bonus of developing a relationship with a seller he would not otherwise know.

Win-Win situations in business are rare. Why then are the traditional, big brokerages so adamant that new services such as flat fee listings cease and desist? Do they not believe there is a 6% value in the service they offer? Do they need a reassurance course in Basic Economics 101, which teaches that broader consumer choices lead to increased revenues for those who are forward thinking?

Brokers, you are selling yourselves and your services short. You worth is far more to consumers than your ability to restrict the exchange of beneficial, public information. My advise to you is to relax. It's only the "change" word that is scary. Most home sellers will never attempt to sell a home by themselves, MLS access or not. And, in the end, if its good for everyone, everyone wins, anyway.

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What Can Bring Down Real Estate Commissions?

For most of us, the largest single purchase we will ever make is a house. 77% of us buy and sell our house by engaging the services of a real estate broker. In recent months, the real estate industry has been featured in the news about new discount brokerages offering cheaper alternatives to the 6% commission rates and the tactics of used by the traditional brokerages to stop any and all new options from reaching the consumer.

Alternative's in real estate would be welcome news for consumers, who paid over $90 billion dollars in fee's in 2004. But, what should consumers think about the new alternatives? Do the new brokerage models promise real savings for buyers and sellers? Is traditional real estate violating anti-trust laws?

For decades, buying and selling a home has been a routine process. Traditional brokerages offer "bundled services" to buyers and sellers. These bundled services include an MLS listing, marketing, open houses, negotiations, contracting and closing assistance. In exchange for the services, brokers receive a percentage (usually 6%) cut of the sales price of the home. Under this traditional system, the seller contracts with the broker. The buyer has no input, but shares the costs because the 6% fee is included in the asking price of the home.

Under the traditional system, there is no option to select only the services that you need. The system offers no cost savings or incentive for buyers or sellers willing to do some of the work themselves. It offers no compensation for a buyer who finds a house themselves without an agent. It was and is an all or nothing proposition for everyone involved.

Many scholars and casual observers began to notice that the 6% commission rate had remained stable over the years, which suggested there was not real competition among agents. This fixed fee was especially significant because house prices increased 94% from 1991-2004. The increase in home prices translated into a 51% increase in revenue, per house, for agents, but did not create price wars or competition in fee's, during the entire period. This type of news is bad for consumers and suggests price fixing and anti-competition in the industry.

2005, finds that the times are finally changing. 70% of buyers and sellers now use the internet when searching for homes. The internet has significantly reduced the time and costs of buying and selling a house. The California Association of Realtors report shows that agents spend one-third less time showing homes to people who look on the internet because they spend more time searching on their own. The internet has made matching buyer and seller a much shorter, easier process. The mortgage process is much quicker, precise and more competitive due to the web. Advertising property has never been more affordable, nor covered such a wide demographic area, thanks to the internet.

In a true competitive market, these cost savings to brokers should be reflected in lower commission rates, but this does not appear to be happening on a wide scale. Brokers are protecting their "turf" through discrimination against new brokerage models, such as flat fee, discount or online listing companies; real estate lobbiest and legislators are requiring "minimum service requirements" in many states, which essentially eliminate " a la carte" options; state associations have also banned the use of rebates to thwart fee competition.

What new business models offer pricing competition and beneficial services for buyers and sellers? Which of those will likely survive the "bullying" tactics that eliminate competition and choices for consumers?

Tomorrow, we will look at the new world of real estate. We will begin with new businesses that appear to offer the most choices and value for consumers. We will cover the pro's and the con's and clear out the smoke and mirrors. Please check back and feel free to comment on your experiences or feelings about these topics. As with all change, there are many feelings on all sides. We intend to uncover valid and invalid and above all, keep you informed.

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SOLD: $1.4 Million Dollar Trailer House

Trailer for Sale or Rent...I'm King of the Road

Wanna be a Colonyite (For those of us not in "the know" that's what the star residents of Malibu, CA call themselves) or at least live in a trailer park in the same zipcode? Wanna shock and awe your friends by pointing to the tile rooftops of your neighbors and dropping names like Brad Pitt, Barbara Streisand, Tom Hanks, Sting, Whoopie Goldberg, Mel Brooks, Tatum O'Neil? Then, just hook your trailer hitch to the stars and move your mobile home to Malibu. Mobile homes and Malibu. Finally, something new in Hollywood.

Does the trailer skirt stay? Two bedroom singlewide trailer For Sale. Sorry, you don't own the land, but you can rent it from the trailer park, Point Dume Club, for $2700 per month. Blue Ribbon ammenities include 2 indoor bathrooms with fiberglass tub/shower combo; vinyl floors; fiberboard cabinets; trailer hitch and all the sawdust and glue you would expect in a trailer of this quality. Asking price $1.4 million dollars. Better Hurry! Won't last long at this price.

I imagine Chairman Greenspan wishes he would have said the real F*** word last week instead of froth. This news should be enough reason for everyone to agree that interest rates should be raised back to 13% for 30 year fixed rate mortgages.

Of course to be fair, you get a lot more than a singlewide on a rented lot with this deal. You don't live in a trailer, you live in a mobile villa. Your mobile villa park has a shared tennis court and a security gate, though breaking and entering into a mobile home is not a crime problem we usually hear about. You also have a tip toe view of the ocean from the front stoop. There are no views from the windows because... Hello, it's a trailer.

The elated seller is Charley Chartoff, a 29 year old real estate agent working for Coldwell Banker. Now, this guy is a true saleman. I am nomiating Charley for the Rising Star in real estate award for 2005. If anyone can top this guy's salesmanship, I want to see the trailer they sold. Way to go Charley!! Man, if I ever meet you, remind me to leave my checkbook at home.

As for the buyer, we don't blame you for remaining anonymous. Every salesman in the world must be googling for you as I write this. I don't know if this means there is froth in California, but it sure indicates a few bubbles.

Home Inspection Reports.

Should Sellers fix a problem, credit money or lower the home price?

Each solution has its own Pro's and Con's.

No home is perfect. This means that all Home Inspection reports invaribly reveal a defect. Buyers and sellers find themselves back at the negoiation table trying to arrive at a workable solution. Who pays for what is one part of the process. Figuring out how and when the repairs will be made is the other.

When negoitating repairs or defect issues, there are 3 options for most home sellers and buyers. There are advantages and disadvantages to each option.

1. The seller can complete the work before closing.
2. The seller can credit money to the buyer at closing and the buyer can fix the problem later.
3. The seller can reduce the purchase price by the amount of the repair estimates.

OPTION 1: If the seller fixes the problem before closing, the work is done. The buyer doesn't have to deal with fixing the problem after they move in. But, the sellers, who are moving on, may not take the same interest in overseeing the work as the new home owner might.

If the seller is fixing the defect, they may opt to do the bare minimum required to "fix" the problem. The seller may perform the work themselves to save money, even if they are inexperienced in making such repairs. A buyer who would choose an upgrade or prefers the repair be made by a professional, should negotiate for a credit at closing and handle the repairs themselves, once they move in.

If the seller is making the repairs, the buyer should have the right to approve any work order before the job is underway. The buyer should make sure that the contractor guaranantee's their work to the new buyer, as well as the seller. The seller should provide a copy of the paid invoice, and any workmanship warranties to the buyer after the work is done.

HOUSE BUYING TIP: SELLERS OFTEN PREFER OPTION 2.

Sellers usually prefer to credit the buyer for repairs at closing. This relieves them of the responsibility of having work done in the midst of their move. If you are having trouble convincing a seller to make a repair, you might offer to accept a credit to speed the negotiations.

Credits can also be a very cost-effective way to solve a problem, if buyers are planning a larger renovation. It might be a waste of money to repair a stove if the buyer is planning a kitchen remodel, for example. In such a case, a credit benefits both parties. Since there is usually several ways to "fix" any problem, a credit allows the new owner to decided how to fix the problem and when to fix it.

If the seller and buyer agree that a credit is in their best interests, buyers should check with their lender before finalizing the repair negotiation. Many lenders have limits on how much money they will allow a seller to credit to a buyer at closing. Buyers: If you accept a credit for repairs, make sure you follow through and have all the work done after you move in.

Option 3: Reduce the purchase price.

Credits generate extra cash to make repairs, which works well for buyers who are cash-strapped. If cash is not an issue, a price reduction can make sense for buyer and seller. Since closing costs such as title insurance, transfer taxes, etc. are based as a percentage of the purchase price, a lower price means less closing fee's for both parties.

In many area's, property taxes are based on the purchase price. A lower purchase price can result in sizable, property tax savings over time. Also, if capital gains are of concern to the seller, a lower sales price can mean real savings come April 15th.