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.