Another Glowing Testimonial

I have done four real estate transactions over the last several years. I have had outstanding service with Homeowners Concept. The process of listing, showing, selling and purchasing were made so easy for me to understand. The education that was provided to me at no charge and the knowledge that was bestowed upon me was beyond impressive. I initially chose Homeowners Concept because I just didn't want to give away the profits of my first home sale to the Real Estate Agent in big commissions. I was charged far less than the 6% companies. I have recommended Homeowners Concept to many of my friends and all have been pleased with their experience. I will continue using Homeowners Concept for any and all of my future transactions. Thank you for your expertise and saving me a bundle.
Sincerely,

Stefani Miller

NOT a smart move...

This property at 242 N. 112th st in Wauwatosa had been for sale with us for a few months. The listing agent knew and the comments by buyers viewing this property confirmed the fact that it needed a lot of updates for the money (it was an estate sale). The sellers did bring the price down to $169,900 but refused to go any lower. Part of the problem was that another home on the same block had received an Accepted Offer and it was priced in the $160's. Never mind that the interiors were completely different, in the sellers' mind it had to be the "Realtor". When the time came to the expiration of the listing contract these sellers acted upon the idea that another broker would somehow produce different buyers that would indeed like the interior for $169,900.

So after a few days off the market the home reappeared on the market with the Realtor that had the home down the street. BUT the price was dropped to $155,000; $15,000 LESS than they had it priced with us AND now the sellers were paying thousands more in commission PLUS hundreds more in closing costs! Hah?

So all along the sellers were blaming us for not selling the home when in fact the sellers didn't give us a shot at selling the home at the right price. The smart thing would have been for the seller to stay with us and reduce the price by the $15,000 and go on to save thousands in commissions at the end.

Bottom line is that if a home doesn't sell with our company with the vast marketing and expertise we offer, the price needs to be adjusted. Look, no matter what the selling price ends up being, one can always count on saving thousands in commissions AND closing costs.

Selecting an Agent Based on Highest Recommended Price is a Mistake

You are planning to sell your home and interviewing a few potential real estate agents to help you with the process. Each agent describes their services and offers up a pricing recommendation based on their knowledge of the local market. Often agents with the highest recommended prices ooze with confidence and say “I can get you $50k more than the other guy.” Of course sellers want to maximize the amount that they receive for their home, so time and time again, we see sellers making their selection based on the agent who promises the highest price. Choosing your agent based solely on the fact that they recommended the highest list price is one of the biggest mistakes that a home seller can make as evidenced by the daily high rate of reductions (typically, 130-150 homes get a price reduction each and every day). Let’s look at why.

There's No Place Like Home

1. Inflate the price to get the listing – This is one of the oldest tricks employed by real estate agents to get your business. Listing contracts are lengthy and exclusive to the listing agent. By luring you in with false hopes of a higher price, they know that once they have the listing, they have a few months to work on you to whittle down the price until the point that it sells. When competing with other agents for your listing, there are plenty of agents out there who will outright lie about the market value of your home to get the deal.

2. Ignoring negative features of the house – Just because a neighbor’s similar house sold for a certain amount does not automatically mean you will receive the same. Maybe your house hasn’t been maintained or updated like your neighbor’s home or the floor plan is not quite as desirable. Sellers often ignore such factors in hopes of getting a higher price, or maybe some negative factors simply don’t bother them after years of living in a house. The agent who ignores such negative factors when pricing a home is doing the seller a huge disservice. Even if these negative factors do not bother you as the seller, they will impact the amount that buyers are willing to pay for your home.

3. Real estate agents cannot guarantee a price – Real estate agents are not able to tell you how much your home will sell for. That is a sales pitch perpetrated by aggressive agents. Agents who start the sentence with “I can get you $XXX…” should be viewed with skepticism. An agent can only provide you an estimate of what they think the house will sell for based on recent sales and current supply and demand in your neighborhood (this is where expertise plays a huge role).

4. The market determines value, not your agent – The actual market value of your home is determined by what a buyer is willing to pay for it. Supply and demand changes periodically and your home needs to be priced to entice buyers to choose your house over your competition. If there are fewer buyers in the market or higher than normal inventories (as is the case now), your price needs to be more enticing to attract a buyer.

5. Free advertising for the agent – You may find this hard to believe, but it may not matter to your agent if your overpriced listing doesn’t sell. Having a sign in your yard, your listing on their website, and hosting open houses can all be ways that the agent will attract new clients.

6. Shorter market times produce the best financial results – Sellers who took the bait of a higher suggested price often grind away on the market for months or years at a time with repeated price drops. When the home finally sells, it ends up at a more realistic price that was originally suggested by the more conservative agents. Had you taken their advice initially, the home would have sold much quicker for the same net result.

7. The comparables don’t lie – Does the data really support the higher list price that an agent is suggesting? Are the recent sales truly similar in age, size, configuration and location to yours? Don’t be duped by a set of comparable properties that are listed at higher prices unless you have evidence that properties are actually selling in your neighborhood at those price points. Looking only at unsold listings can be misleading, as there are certainly a fair share of overpriced properties on the market. List prices do not necessarily equal market value.

8. There is both art and science to determining home prices – There is a wealth of information and market data available online these days, and a rigorous analysis of that data will help you to arrive at a realistic price for your home. However, an agent who offers data analysis without looking at a range of properties in person is being lazy. Every piece of real estate is unique, and a proper pricing analysis does involve in-person analysis of the home, competing homes and the surrounding neighborhood.

9. A reputable agent will turn down an overpriced listing – The list price for a home is ultimately a seller’s decision. However, an ethical agent will turn away a listing that is clearly not going to sell at the proposed price. It can be a waste of effort for the agent, and it does a disservice to the seller with long market times and sub-optimal financial results.

10. The second agent will save the day – The best agent to be in this scenario is the second agent that comes on board after the first agent’s listing expires. The first agent promised a sky-high price, but after 6 months on the market and numerous price drops, sellers often become frustrated and will switch agents. As the second agent, the home is likely queued up at a much more reasonable price, and with a fresh listing and a bit more marketing, the house finally sells. The replacement agent looks like a hero to the seller, but in hindsight, the seller could have achieved the same result months earlier by not falling for the promise of an overinflated price.

As a Company, we end up losing multiple listings every month because we are “outbid” by agents who claim to be able to get a higher price than us. For the past 2 years we can say with confidence that ALL of those potential listings did have to drop in price at or below the price we suggested. It does neither us nor a seller any good to overpromise on a price that clearly won’t work, especially in today's real estate environment

BBB honors Homeowners Concept.

Today Homeowners Concept was recognized by the Better Business Bureau during the annual Torch Award luncheon, for 25+ continuous years of great service and an A+ rating. Homeowners Concept Realty is the only large real estate company to have 25+ years of an A+ rating with the BBB in metro Milwaukee.

This award is a testament to our deep desire to not only provide thousands of dollars in commission savings but to do so with uncompromising quality of service. We're extremely proud of this achievement. If you want to deal with a superior company that's filled with superior agents, Homeowners Concept is that company.

WE'RE NOT A FLAT FEE COMPANY & DO NOT CHARGE AN UPFRONT FEE!

In 2009, Homeowners Concept switched from being a flat fee company to charging just 1.5% of sales price. Our flat fee before was around 1.5% anyhow as it was a tiered fee, so there is very little impact to any of our clients. The primary reason behind the switch though, was the fact that we HAD to disassociate ourselves from the other Flat Fee/Limited Service companies which have popped up in the last few years and are now showing histories of very low success rates (60-70% of their listings DO NOT sell) while charging the sellers a hefty upfront fee of around $500. Most of these outfits are doing just MLS data entry, and they could care less whether the home sells (they got paid upfront!). They do not provide marketing or any professional and ongoing expertise. The sellers that list with flat fee companies are pretty much on their own. Thousands of sellers have fallen victim to paying the hundreds of dollars upfront, wasting months or years on the market and having to turn to another broker (or to Homeowners Concept) to eventually sell.

Homeowners Concept on the other hand is a FULL service company which offers more marketing and more experience for less commission due to innovative and efficient systems and has been around since 1984. We have a vested interest in making sure the home gets maximum exposure (percentage wise we spend the most amount of money advertising properties of any company) and bringing expertise to get the home sold. That entails advice on staging, getting feedback from buyers, properly negotiating the contract and subsequent issues with inspection, financing, closing, occupancy, etc. We have also earned an A+ BBB rating - one of only two large companies to have this! We actually work very hard for the money and we DO want the homes to sell.

The flat fee outfits are usually one or two person shops because it is such easy money for little work with NO pressure to sell the homes. The proliferation of these is reminiscent of the online FSBO websites that were started as internet became mainstream. Hundreds of them have shut down in recent years as consumers wised up that spending hundreds of dollars upfront to be on "somebody's" website that received virtually no hits, was indeed useless. We feel the same fate awaits the MLS only/limited service companies.

Effect of the Homebuyer Tax Credit.

This morning the National Association of Realtors reported that existing home sales in July plunged 27.2%.

Not surprisingly, the end of the homebuyer tax credit caused these sales to fall off a cliff. People just didn't realize how high that cliff was.

In case there was any doubt that it made a difference, this chart from Waverly Advisors shades in the period of the tax credit. Home sales started rising immediately, and have fallen off immediately with the tax credit's expiration. The July numbers to the far right are the lowest in the last 10 years.

As we move away from the distortion that the tax credit caused, we expect sales to rebound to levels witnessed early in this decade, especially with mortgage rates at around 4%.

Getting the right selling strategy.

Metro Milwaukee home values appear to have stabilized despite a daunting inventory of homes for sale. Although this is certainly good news for anyone trying to sell their home, it can prove to be quite tricky when it comes to developing a pricing strategy.

If you are unsure about the changes in home values, and how this may affect your pricing strategy, you’re not alone. Most sellers want to price their homes aggressively, and also price them to reflect the changes in buyer habits; but they also don’t want to price themselves right out of the market.

How to Develop an Accurate Pricing Strategy:

• Hire a qualified, seasoned real estate agent – This is one area of selling your home that you don’t want to skimp on. Find a top-notch agent who understands the market and will advise you on how best to present your property to the buyers. Such an agent sells a lot of properties (far more than the average), works full time and is a veteran in real estate. As many of you know, all of Homeowners Concept agents fit these requirements.
  
• Price it right – Although this may seem like a no-brainer, many sellers, absolutely sure of their ability to sell their home at a higher rate than other comparables in the area, find themselves sitting on their property without an offer in sight. The bottom line is that your pricing strategy should accurately reflect neighborhood home values, not your idea of what you think your home is worth.
• Develop a realistic sales strategy – Decide upon your sales strategy beforehand so that your game plan is put in place. More importantly, however, make sure your sales strategy is flexible so that you can react according to the market and according to home values.
• Make it ready to sell – Most buyers of today are looking for turn-key properties, so make sure your home is in excellent condition before you list it for sale. It is important to realize that all the pricing strategizing in the world can’t make up for a home that doesn’t compare to other homes in the neighborhood. Clear out the clutter, stage it to sell, and perform any repairs or upgrades that will allow it to compete with other homes for sale in the neighborhood.

Rent With the Option to Buy

We closed on yet another home that was rented with the option to buy. The sale was completed in less time than was allotted in the contract, as the buyers were able to qualify sooner and get the low rates of today. During the time of the Rent to Own contract was in effect, the seller was able to cover the mortgage while the buyer worked on getting the downpayment and bringing the credit score to a level that they could qualify. Increasingly this is an option that sellers turn to to sell their property, especially if the property is vacant.

The way the Rent to Own program works is as follows: Buyer agrees to rent the property until such time (usually up to a year - but can be extended) that the buyer can get a loan. The buyer cannot qualify for a mortgage upfront due to credit, length of time on the job, sufficient downpayment or other reasons. Buyer would pay an upfront "option premium" which would not be refundable (usually around 1 to 2% of sales price ). In addition any amount above and beyond an average rent for a similar property can be credited toward the downpayment of the buyer.

From the standpoint of the seller, the Rent to Own provides a temporary tenant that could look after the property and help with the mortgage. The buyer on the other hand gets into a property they can call their future home. As a result they can make improvements with the blessing of the seller. Most times the sellers agree to the improvements/updates since it makes their property more valuable. At the point in time that the buyer can get a mortgage the property can go to closing and seller can transfer title. Homeowners Concept has done hundreds of Rent with the Option to Buy contracts since 1984, as a result we are very familiar on how to negotiate and structure the contract so that the property does eventually close.

Beware of high administrative fees when paying 6%

Did you know that most high commission companies charge an administrative fee of anywhere from $195 to as high as $600 at closing? THIS is above and beyond the 5% or 6% commission one pays with these companies. It is a travesty that so many sellers blindly pay these fees on top of an excessive commission. These sellers either do not know any better or they are in a frame of mind of paying over $12,500 for the average priced home that they figure what's a few hundred more.

Our administrative fee is only $95 AND you pay much less to sell and have a truly skilled Realtor on your side.

Bottom line: a few hundred dollars on top of the thousands ONE SAVES BY USING HOMEOWNERS CONCEPT adds up to a substantial amount of money, especially in this economy. And even if one wants to be a big spender with money why not take the savings and make a big donation to your favorite charity. YOU WILL feel good rather than spending it on unnecessary commissions.

Why List With Us?

Perhaps the better question is "Why Wouldn't You List With Us?" ...

In the world of real estate today, there's a lot of confusion about what you get for the money you pay in commission. So many things have changed that even Realtors find it hard to explain what differentiates them from anyone else.

And then there's confusion over what really matters in the sale of a home! Do the big firms have an advantage? What matters more - the agent or the firm? What services truly impact a sale? What's fluff in the Realtor sales pitch?

If you analyze the way buyers go about finding and writing an offer on a property in this internet connected era, you will come away with the following important items. Buyers care about how your home is priced for its location, features and condition. An agent and the respective company should assist the seller to optimize the way the property presents itself to the market, pricing it correctly, maximizing exposure and use his or her experience during negotiations once a buyer(s) wants to buy. In other words a seller should be employing a Realtor that has considerable expertise, offers to cover all bases to expose the home and have strong negotiation skills and attention to detail. To that end, one will be hard pressed to come up with a better package than what Homeowners Concept offers. The savings in commissions is really a bonus.

It's all in the data

You see the average agent at Homeowners Concept sells 3 to 4 times more homes per year than the high commission agent and has been in real estate for 17 years vs only 4.5. Add to this the extensive marketing we provide via our unique magazine and high trafficked website. The differences are SUBSTANTIAL and our services stand above of the higher priced solutions! High commission agents persuade sellers to pay unnecessary commissions when in fact, on average, they deliver less than us.

Most people fail at selecting experienced agents.

Experience Matters When Selecting A Real Estate Agent – Just Not For Most People

Surveys show that only 57% of home buyers or sellers would use the last agent they worked with in the future. By service standards that is a very low percentage. Part of the problem is that people put very little thought on selecting an agent. As a result, many consumers are stuck with a mediocre agent.

Buying or selling a home is the single largest transaction that most consumers undertake. The process can be filled with uncertainty, emotion and pitfalls, so most buyers and sellers choose to work with a real estate agent to help them through the process. Selecting an agent is obviously an important step, and most consumers would agree that agent expertise and experience should weigh heavily in that choice. The shocking statistic is that the majority of home buyers and sellers select agents who have little or no experience closing real estate transactions.

Most Consumers Do Not Select Experienced Real Estate Agents

If one delves into the statistics one can see that the average agent sold a little over 6 properties in 2009 in metro Milwaukee. That is one every other month. Hardly enough to be an expert in this field. If one removes the number of sales from the top 200 agents (this includes 9 out of 10 of Homeowners Concept agents) then we are left with 2,500+ agents that only did 2-3 deals last year. Surprised by the data? Most people are. If there is one thing that can be said for our industry, it is that there are loads of hucksters and part-timers out there who fast talk their way into a couple of deals each year. Consumers can do better.

How Many Transactions is Too Many?

A small group of agents closed a very large number of transactions in 2009. A few agents closed more than 50 transactions last year. Certainly they have significant transaction experience, but realize that the only way this is physically possible is by working with a substantial team of folks or by sacrificing service. There are only so many hours in each work week and in the high commission world an agent spends considerable time trying to get listings. If you are planning to work with a very high volume agent, recognize that you will be interacting more with their team than with the agent who is getting credit for the transaction, or you may be sacrificing service levels because your agent is assisting so many customers. You will want to understand who is on the team, and when exactly you will get to work with the main agent, along with getting clarity on the service levels that they provide to you.

Striking a Balance

Consumers should require that their agents demonstrate results. Stick with full-time agents who do this for a living and are closing at least 2 to 3 deals per month, and you’ll be using an agent in the top 5% of all agents in Greater Milwaukee. Our own agents consistently rank in the top 5% of agents (and of course, the savings in commissions is a bonus). We are able to close more deals than a typical agent by focusing 100% of our work on selling homes and closing deals, not on trying to prospect for clients. At the same time, we are not ultra-high volume agents, to make sure that our customers do not have to sacrifice service to obtain our expertise. Furthermore and because of the way the Homeowners program works we have an extremely low turnover (unlike the high commission agencies). The strategy is to have only full time agents that have been in business a very long time and do at least 3 times as much sales per year as the average agent. To that we have succeeded and our clients are very thankful. Our record and A+ rating with BBB speaks for itself. Consumers should be more diligent when selecting their real estate agent and make sure that they select agents who have substantial experience getting deals done.

How quickly you sell depends largely on which seller profile you fit in.

Getting your home sold in the Greater Milwaukee area is not as tough as you might think despite the market (now dealing without the tax credit). The key is understanding a few things about yourself and how you approach the market that determines if and how quickly you sell.

What Home Buyers Want

Right now, there are roughly half the number of buyers in the market as we would normally see. As a general rule, they are conservative and concerned due to the state of the economy and tough lending requirements. They are looking for value. Ultimately, they are going to buy the home that is the best value on the day they make their purchase decision… Wouldn’t you if you were buying today?

Understanding The Housing Competition

Knowing that buyers are looking for value, another key factor if you want to sell a home is knowing who your true competition really is. For you to determine “good value,” you have to know what to compare with. This takes working with a real estate agent that understands the market better than the others. Choosing your initial market position is perhaps the most important factor when deciding to put your home on the market.

Your Motivation To Sell A Home.

So you know what buyers want and you understand your competition and how to value your home, the next and final step is to understand your current situation. Are you motivated enough to sell your home? Here’s a simple test:

Pick which of the below choices best describes you. Think seriously before you decide, as this will help you greatly.

1. The Casual Seller - The casual seller says things like “We are not in a hurry,” or “We don’t want to give it away.” You can expect this person to say “We will sell if we can get $X ….”
2. The Serious Seller - The serious seller says things like “I understand the market and I’m willing to sell my home for what I’m seeing out there.” This seller is ready to sell at “perceived market value” and they expect to price their home with the competition to get it sold.
3. The Very Serious Seller - The very serious seller must sell now. They are willing to create a perception of value and entice buyers to select their home before all others.

Who will sell their home in the next few months?

So, what kind of a seller are you?

If you answered the above question as honestly as you could, you need to know that the casual seller is not going to sell their home in today’s market. There are just way too many homes for sale and the casual sellers are doing themselves and the very serious sellers a dis-service by adding to the inventory.

The market will eventually recover and there will again be great times to sell, but today’s buyer pool is looking for value. Even the serious seller is most likely not going to sell their home. With over 11 months of supply in SE-WI plus new short sales and foreclosures entering the market, only the very serious sellers have the best chance of being successful over the next 12 months. Luckily with our very low commission of 1.5%, a seller listing with Homeowners Concept has quite a few thousands of dollars in savings to play with (As did idol Danny Gokey). A serious seller can take the savings and deduct it from the list price making their home much more attractive to buyers.

One of our agents gets featured in the Journal.

Jeanne Van Oss, Homeowners Concept, Wauwatosa
By Robert Warde

Posted: May 29, 2010

For 23 years Jeanne Van Oss worked as a commercial pilot for leading airlines and a corporation. During those flights she hung her hat where passengers boarding the plane could see it. Inside and visible to those passengers was a card that read “attitude is everything.”

It was that outgoing personality that caused several of her friends to advise her to go into real estate and within weeks after the Sept. 11 attacks, her seniority class at American Airlines was told it was going to be furloughed. Van Oss needed a job fast. She lived in Illinois at the time and got her license as soon as she could.

“I’ve always liked helping people. Even when I was at O’Hare, when I had some downtime, I would stand in the concourse and help people get to their gates. I just enjoyed doing it. In a way, I’m kind of doing that now with guiding my clients to their closing. I also enjoy the fact that each transaction is different and has its own situations and challenges,” Van Oss said.

In 2003, Van Oss wanted to live outside of the city. “I grew up in the country and I wanted to be in the country so we moved to Burlington in 2003,” she said.

Van Oss joined Homeowners Concept, a company that offers options ranging from limited to full service. “When I heard about Homeowners Concept, I joined them in 2009 because they have a full-service option. They do huge volume and I’m able to support my family. I’m real happy here,” she said.

Van Oss recommends referrals and doing some homework as the best way to find an agent. “Referrals are huge. Ask your family and friends for an introduction and if they don’t know anybody, then I would do a search and interview three or four different companies and look for that sense of reliability, trust, values and what they provide in a sense of history,” she said.

Van Oss has built success in the business, already meeting her 2010 sales goals and will have eight sales closing in June if all goes well.

In recalling her first listing in Wisconsin, Van Oss said it could have been the highest commission she earned, even though she enlisted the help of another broker in her office at the time because he had more experience selling commercial real estate. Ultimately, the owner of a $4 million hotel in the Wisconsin Dells opted not to sell, despite several offers.

“It was challenging learning all the ins and outs of commercial real estate and driving to the Dells to show the hotel. I think she was trying to see what people were willing to pay,” Van Oss said.

In her off time, she likes to plant wildflowers and work in her garden. “I also spend time with my children. I have two little ones and a teenager. I like to spend time with my husband and kids and catch my breath. We love to ski and bike and do things outdoors,” she said.

Van Oss also is a member of the Humane Society and works to create awareness of shaken baby syndrome. Her awareness has been heightened with the number of media reports about children who have fallen victim to being violently shaken. Someday she’d like to use her flying skills to make missionary trips to South Africa or South America.

Coldwell Banker's Buyer Bonus gimmick!

The government tax credit for home buyers has now expired for a little over 3 weeks. Coldwell Banker offices across the country have been promoting a 3-month national sales promotion called the Buyer Bonus Program open to all buyers. They claim that the Buyer Bonus “will allow participating Coldwell Banker home sellers to ‘essentially’ extend the tax credit for participating homebuyers.”

Sounds fantastic, doesn’t it? If I list my home for sale with a Coldwell Banker agent, I can magically extend the $8,000 credit to potential buyers. What’s the catch? The catch is that sellers participating in the promotion are giving 3% of the accepted offer price – up to $8,000 – as a credit at closing back to buyers who sign an offer before July 31st. This is not a promotion at all, rather it is a marketing ploy by Coldwell Banker to get their sellers to lower their proceeds by $8,000! Coldwell Banker agents offer no contributions in the process, other that advertising that their sellers are willing to concede $8,000 for offers before July 31.

Sellers have always been able to offer concessions to get their home sold, whether in the form of price reductions or contributions towards buyer closing costs. If you are a seller, there is nothing special about this promotion. These are pricing tools that have always been available to you and your agent. No matter who your agent is, if your home is not selling, you should have a conversation about your asking price, incentives you could offer to buyers and any other improvements that could be made to the property to attract more buyers. Many buyers already ask sellers to contribute toward their closing costs and this item is part of the negotiations.

So, this Buyer Bonus program is a pure gimmick as there is NO contribution by the Coldwell Banker agent, other than a promotion to get you to list your home with them and lower your price at the same time. There are a variety of brokerage options available today that WILL save sellers a substantial amount in real estate commissions which they can pass along to buyers to help accelerate the sales process. Listing with Homeowners Concept at the 1.5% or the 4.4% programs will save you money either way, while still providing outstanding marketing and customer service to get your home sold.

Great 5 & 7 year ARM rates one should consider!

Many buyers are not aware of the extremely low Adjustable Rate Mortgages available, specifically the 5 and 7 year. As of this writing one can lock in for a 7 year ARM for 3.75% rate. The 5 year is even better at 3.5%. These are conventional rates although FHA which offers lower downpayment and more flexible underwriting criteria is also offering a 3.625% 5 year ARM. The rates are quoted by Netcentral Mortgage (netcentralmorgage.com/414-258-7833) which is located in the same building as our central office in Wauwatosa.

In the conservative environment of Southeast Wisconsin most buyers refuse to even consider the ARMs. Yet, if one had been in an ARM for the last 25 years, they would have enjoyed tremendous savings over a fixed mortgage (and would not have to incur refinancing charges). As the rates adjusted lower the ARM would have adjusted lower and ARM rates are lower than 30 year rates.

Most buyers have been reluctant to purchase or refinance with an adjustable rate having this fear that rates will go up, yet if one looks at Japan the fixed mortgage rates are close to 2%. In the economic environment we are in, it is very conceivable that fixed rates can continue to move lower to the 3-4% range. Adjustments to the ARM rates at the end of 5 or 7 year anniversary would then translate into a new rate in the 2-3% range.

Seller w/Flat Fee Co. wondering why she's not selling.

A question was recently posed on Trulia a national real estate website. A seller was wondering whether there is a conspiracy among agents to not show or write offers on homes that are FSBO yet on MLS with a flat fee/limited service company. I am certain that there is no such conspiracy but for various reasons FSBOs using a flat fee company do have a very low chance of selling (some companies have dismal records of only 20-30% success rate).

There are a dozen or so small companies in Greater Milwaukee which will put a FSBO in MLS for a flat fee of usually $500 UPFRONT. Most of these outfits are doing just MLS data entry, and they could care less whether the home sells. These outfits are well known in the industry as: “list them and forget them”. Their listings are flagged in MLS as "Limited Service".

Obviously, being in the MLS is far from enough to get the property sold. There needs to be a strategy on how to best market the property and how to best present the home to the buyers. At Homeowners Concept we take a good bit of time explaining our strategy to home sellers on how we use our magazine and the internet (including the MLS) to get their home sold. Just being on the internet (and the MLS) is not enough in today’s very competitive real estate market.

In my opinion, she has chosen to go at it alone and is finding the going very lonely. She should hire an advocate to help her get her home sold (We even know the best real estate company in metro Milwaukee that will also save her thousands in commissions!). I am shocked that somebody who needs to sell a home does not understand how important having great help is in this market, especially when most of the time, we are less expensive than the flat fee route. Why do some Homesellers not “get it?”

Over the last few years, thousands of sellers have fallen victim to paying the hundreds of dollars upfront just to get in MLS, wasting months or years on the market and having to turn to another broker (ourselves included) to eventually sell.

Danny Gokey's home gets an Accepted Offer!

Within a few short weeks on the market, this very nice home in the far NW area of Milwaukee received an offer. After some lengthy negotiations, the American Idol star accepted the Offer. Needless to say, this makes not only the seller very happy but the Homeowners Concept family as well. You see, this is the second time in the last couple of years that we have had the opportunity to sell a home associated with an American Idol finalist. The last time it was Taylor Hicks girlfriend's home in Glendale.

So Danny does not have just a great voice, he's also a very smart guy because by using Homeowners Concept and paying only 1.5% commission he netted over $13,000 in savings over a 6% commission! Meanwhile he received the most in marketing the home and unparalleled expertise from staging the home to negotiations to a smooth closing (the agent for this home has been in business for 16 years and sells 4 times as many homes than the average 6% agent). As many of the tens of thousands of past sellers (26+ years in business!) have remarked: "it's a no brainer" using our service.

What happens when the tax credit expires?

For the last couple of months, we’ve been turning a corner of sorts in real estate. The number of sales has increased, inventory is slowly decreasing (still high though) and foreclosures have stabilized. As the opportunity for the tax credit comes to a close on April 30th, many sellers, buyers and Realtors are wondering what would happen to the market thereafter.

Although no one has a crystal ball, one can make an educated guess as to what to expect. Below are some of the reasons I believe the market after a dip in May will continue to march ahead of 2009 in the number of sales.

1. We know that even with the tax credit in place only about 1/4 of the buyers were enticed to buy to secure the credit (study was done by NAR in late 2009). That leaves at least 3/4 of the current buyers in a state to continue shopping for a property.

2. Many of the buyers that are in the market to get the credit have waited till the last few days to write offers. Some of these buyers will not find a home by the deadline and may continue to look after the deadline. Of the offers written in next few days some will fall apart, as many are written by mediocre agents (see other posts about this very subject). Those buyers I am sure will go forward to secure another home.

3. The economy appears to be improving and more unemployed should be heading back to work. As consumer confidence goes up we would expect additional buyers to enter the market replenishing the buyers lost due to the lack of the tax credit.

4. Interest rates are at historic lows and should continue low unless the overall economy heated up considerably.

5. Down payment assistance programs and grants continue to exist. Should the market not recover sufficiently, expanding programs for the first time homebuyer could become reality.

Even though we expect sales to stay ahead of 2009, prices will still be under pressure due to the high inventory of homes for sale and appraisal issues which are a result of new rules.

Another American Idol connection!

For 25 years now we have sold plenty of local celebrities' homes (many celebrities are smart people and choosing Homeowners Concept is the most intelligent way to sell). Recently, we seem to have connected with American Idol celebrities. A couple of years ago our company sold Caroline Leiter's (of Channel 12) home in Glendale who was seriously involved with Taylor Hicks. In fact he showed up in one of the interior photos.

One of our most recent listings involves Danny Gokey's house. This 2006 split ranch at 11212 Sanctuary Drive, Milwaukee is an absolutely fabulous home boasting quality, grace and perfection. 2,172 sq. ft. 3BR/3BA, 3.5 car Garage , Gourmet KIT, soaring ceilings, professionally decorated. For all the other amenities and interior photos you go to Http://HomeownersMKE.com, just enter "sanctuary" in the street name.

Seller gets $26k more than originally offered.

The seller of this property at 4344 S. 51st in Greenfield was contemplating of selling it to Homevestors for $125,000, when on a lark he decided to call us. For those of you who are not familiar with Homevestors, it is a franchise that typically buys properties in need of work and for a price below market value in order to remodel and resell for a profit.

One of our agents Julane Myers went to the property and upon further review she suggested that seller could get as much as $160k for it. Seller was reluctant and afraid he might not get much more than the $125k he had already been offered. At the end, he did agree to market the property at $149,900 since he was in a hurry to sell. Within a week 3 offers were on the table with the winning offer at $151K. Seller was ecstatic to say the least and very appreciative at Julane for insisting at the higher price.

The seller was wise to take the advice of an extremely experienced agent (as ALL of Homeowners Concept's agents are). We hire only competent, honest agents that abide by the Realtor Code of Ethics.

April Special-No lender closing costs!

Our affiliate lender NetCentral Mortgage (414-258-7833 - netcentralmortgage.com) has a special for first time homebuyers that are looking at doing an FHA loan and closing in April, NO CLOSING COSTS! This is for purchase only. The only money the buyer will need is downpayment and prepaids (taxes and insurance). The rate on this program is also very good, 30yr fixed at 5.375% with APR of 5.743% (as of 4/1/10)!

30 photos per home now!

We just upgraded our website to handle up to 30 photos for each of our listed properties. Everyone else is at 25 or less. We strongly feel that if a home warrants extra photos the ability to display a large number of them can only help the buying process.

By increasing the number of photos, we continue the long established pattern of providing MORE for LESS commission.  The marketing advantages Homeowners Concept offers also include our own full color magazine with the widest distribution in Southeast Wisconsin and our website which contains the most listings in this area. Couple the superior marketing with one of our highly skilled Realtors and the savings in commissions is your bonus!

For Sale By Owners (FSBO) sales have become non-existent.

Has anyone seen a For Sale By Owner (FSBO) sell in the last few months? We sure would like to know because we have been tracking a number of them over the last 12 months with none of them selling as a FSBO. The last national survey showed less than 10% of FSBOs were successful in 2008. It appears that the figure is much lower today and particularly so in Metro-Milwaukee.

Even in the best of times, during the real estate bubble years of 2002-2005 the best the FSBOs could do were to sell at a rate of about 4 out 10. Since then that rate has gone to oblivion. The number one reason for such monumental failure is the fact that FSBOs provide no help whatsoever to the buyer. If a buyer is interested in buying a property the buyer would most likely have to get an attorney, usually pay a retainer fee of at least $500, take off work (as most attorneys are 8-5) then go through the whole process of negotiating by themselves. Should the Offer not get accepted the buyer is out the money and time. Any issues that arise after the acceptance additional costs are involved. On the other hand, when a buyer buys a property listed by an agent the costs and time constraints are not there.

With such an overwhelming supply of homes to choose from (3 times the inventory of homes that was a few years back) one can see why the buyers shy away from the hassle of buying FSBO. Unless a property is a compelling bargain (much less than Fair Market Value) buyers refuse to venture into a transaction with a For Sale By Owner. You can't blame them.

By the way, Homeowners Concept started and continues to be the missing link for sellers that want to save money yet elevate their chances of selling to same or better than listed with a 6% Realtor. In the last 25 years in business we have assisted thousands of ex For Sale By Owners accomplish the goal of selling their home without paying a hefty commission.

Paying 6% AND getting less, sometimes much less.

We analyzed the listing history of a number of former clients. Over the course of the past three years, 34 former clients have signed with a high-commission company after their listing expired with us. These 34 clients are a case study in how a high-commission company does nothing to improve the chances of selling and is in fact, a huge rip-off.

On average, the high-commission company gets the seller to reduce their asking price -7.8% from our last list price. Once they finally sell (which less than 70% actually sold) they took another 188 days of marketing and they sold for -12.2% less than our last list price. So not only are these high-commission companies simply aggressively reducing the asking price, they are charging on average, almost $12,000 plus hundreds of dollars in administrative fees at closing.

Never in the over 25 years that we have been in business has a client stopped their listing with us, listed with a high-commission company and had the house sell for the same price we had it listed. Never. The first thing the new high commission broker does is reduce the asking price. And reduce it some more. And some more. You would think that if a broker was charging so much money they would have some fool-proof, miracle method of selling homes. They don't. They don't have any more effective means of selling a home than we do. In fact many don't have near the kind of innovative marketing that we provide and to add insult to injury, on average, the seller has to deal with a much less experienced agent that ours.

Some sellers are under this gross misperception that paying much more commission you somehow get more when the data shows that the opposite is true.

Beware of unethical 6% agents.

Since our start in 1984, we have often gotten grief from agents charging much higher commissions. These agents are upset at the fact that we can offer more marketing and more expertise at less cost to the seller. Even though traditional agents could do the same and offer more for less, lowering their commission would necessitate a fundamental change in the way they do business. In other words they will have to get more productive and stop spending so much time and money advertising themselves and market the homes.

You see, there are billions of dollars in commissions at stake, in US alone over $40 billion annually are spent on commissions. Some 6% agents will lie and use name calling and sometimes profanities to try to get a listing and get sellers to part with an exorbitant commission. We find that agents that usually resort to this unethical behavior are the ones that are rookies or do just a few transactions a year, unfortunately the majority of agents fall in that category. Smart sellers though can see right through their lies.

After 25 years in business and having sold over $3.4 BILLION IN REAL ESTATE one can easily say that our program has been and continues to be very successful.

Too many Realtors for the market.

It is no surprise, that the number of Realtors has declined dramatically during the economic and housing downturn, but the exodus from our industry is a long way from over to return us to a realistic number. The chart portrays how many US residents there are for each Realtor (from the US Census and National Association of Realtors)

One can see the dramatic increase in Realtors during the housing bubble. In 2000, there was 1 Realtor for every 368 residents in the US. By the peak of the bubble, there was 1 Realtor for every 220 residents. Between 2000 and 2006, the US population grew by 6% while the ranks of Realtors grew by a whopping 77%!

The lure of easy money for little work was powerful during the housing bubble, driving hordes of folks to get their real estate license. Compared to historical data, we still have way too many Realtors chasing way too few deals. You may conclude that too many agents flooding the market would lead to more competition and lower fees for their services, but the inverse is true. With too many agents comes a powerful incentive for the industry to keep fees artificially high because the low-producing agents need to make a basic living (see the blog post of 8/26/09). An overabundance of agents also leads to the sub-par service levels that seem to plague our industry. As a result more sellers and buyers find themselves obligated to work with a friend, relative or acquaintance who does just a few deals/year or works part time.

What is also striking is that the efficiencies brought about by the internet seem to have had little effect on the total number of agents practicing. The ability to search for homes online has dramatically changed the role of the real estate agent and reduced the number of hours that they need to spend per transaction, meaning we actually need fewer agents to service the population. We know this for a fact because our company has been at the forefront, operating with dedicated agents that do almost 4 times the volume of the average agent and have many more years in business (17 vs 4).

I think we have a few more years of declines ahead of us in the number of Realtors in the US, perhaps more if the internet drives more efficiencies into the process of buying a home. I think it will benefit our industry tremendously to have fewer, better-qualified agents able to close more deals just like Homeowners Concept already operates. Raising the barriers of entry to our profession and increasing the efficiency of each individual agent will lead to better service levels and lower fees.

Understanding/improving your credit score

Lenders use credit scores such as the FICO to calculate interest rates and credit limits. FICO is a score based on mathematical formula developed by the Fair Isaac Corporation. It is the most widely used score in the U.S. According to Wikipedia.com there are several important determinants of your FICO:

* 35% punctuality of payment in the past
* 30% capacity used, i.e., ratio of current revolving debt (e.g. credit card balances) to total available revolving credit (e.g. credit limits)
* 15% length of credit history
* 10% types of credit used (installment, revolving)
* 10% amount of credit obtained in the recent past

The above percentages are approximate. Current income and employment history do not influence the FICO score. Generally, FICO scores range from 300 - 850. Scores at the higher end of the scale reflect a better credit rating.

To improve your credit score so that you can buy a home or get a better mortgage rate:

* Pay your bills on time. Delinquent payments and all collections can have a major negative impact on your score.
* If you are having trouble making ends meet contact your creditors or see a credit counselor. This won't improve your score immediately, but as you begin to manage your credit and pay your bills on time, your score will improve over time.
* If you have missed payments get current and remain current. The longer you continue to pay your bills on time, the better your score will be.
* Pay off your debt rather than moving it around. The most effective way to improve your score in this area is by paying down all of your revolving credit.
* Keep balances low on credit cards and other "revolving credit". Having large amounts of outstanding debt can affect your score negatively.
* Don't close unused credit cards as a short-term strategy to raise your score.
* Don't open credit cards that you don't need just to increase your available credit.

For more tips on improving your credit, visit MyFICO.com