Homeowners Concept

IF YOU'RE PAYING MORE THAN 3.9% TO SELL YOUR HOME, YOU'RE PAYING TOO MUCH!

2012-02-07T09:01:00.000-06:00

Real estate brokers collected $42 Billion last year in commissions. But it could've been much less if all sellers used a program similar to Homeowners Concept. It's a statement we can make with certainty having sold upwards of 23,000 properties since 1984.

Our program has been proven unequivocally to be extremely successful and actually work better than paying a 6% commission. There have been hundreds of instances over the years that our lower commission made the difference in the sale of the home. The thousands in savings and no excessive administrative fees at closing have helped considerably. Couple the savings with all the expertise we bring to the table (only full time, seasoned, incredibly knowledgeable Realtors) and one can see that paying more than our top of the line 3.9% program is a pure waste of someone's hard earned equity.

27+ YEARS OF SAVING YOU THOUSANDS IN COMMISSIONS!

2012-01-10T10:37:00.001-06:00

A client recently commented of how impressed she was at the fact that we have been offering a reasonable alternative to the high 6% commission for such a length of time. Indeed, Homeowners Concept is nearing the 28th year of operation in Metro-Milwaukee. Obviously, we are proud of our record, having sold tens of thousands of properties and saved well over $94 MM in commissions. That is $94 million dollars that Greater Milwaukee sellers are richer for not having to pay an average of 6% commission!

We have done this by providing more in marketing properties (the largest homes magazine and a great website with the most photos per home, among others) and having highly skilled, full time, long term agents who are truly dedicated to real estate.

This is so different than the way traditional high commission real estate works. You see, the traditional 5, 6 or 7% commission office is like a revolving door. Agents enter and leave the business constantly (ever wonder why the larger offices have to continually hire and train new agents, even in down markets?). They count on each agent to at least attract a relative/friend or spend enough money of their own to attract a client outside their sphere of influence. It takes a lot of time and money for traditional agents to convince the consumer to pay the exorbitant commissions and to differentiate themselves from the competition. Sellers for the most part end up working with a mediocre agent and paying a hefty commission.

On the flip side, our agents are all full time, high volume with many years of experience before they even start at Homeowners Concept. We have become the company that not only saves the sellers thousands of dollars in commissions but provides exceptional real estate expertise. Our long term success speaks volumes.

ALL OF OUR PROPERTIES NOW HAVE VIDEOS ON YOUTUBE!

2011-11-23T10:14:00.000-06:00

Besides the additional marketing we do for all the properties we have for sale via our exclusive magazine, we now also post a video of each home on You Tube. You Tube is the second most visited website after Google and is gaining traction as a gateway for real estate. All of our property videos can be found at www.youtube.com/HomeownersMKE. Barely 2 weeks old and a number of these properties have multiple unique hits.

As one can see, paying thousands of dollars less in commission to Homeowners Concept vs a 6% broker gets you not only more advertising but also a much more experienced agent. All of our agents sell 3 to 4 times more homes per year than the average agent and have been in business for 16 years vs only 4.5!

EXCEEDING EXPECTATIONS, the savings was our bonus. Testimonial

2011-11-14T10:48:00.005-06:00

When we decided to sell our house in this current uncertain housing market we knew we were taking a risk, however, after our first meeting with Mary Skanavis from Homeowners Concept we knew we were going to have a knowledgeable and experienced professional by our side.

From the beginning Mary gave us straight-forward facts about our home sale. Unlike some of her competitors, she wasn’t telling us what we wanted to hear; she gave us a clear understanding of what our house was worth and how best to get the maximum price for the home. Together we came up with a “game plan” for how we were going to tackle our home sale. We also felt very comfortable after finding out that she is in the top 1% of agents as most of her coworkers are.

Like a good coach, Mary had almost daily correspondence with us informing us how showings went, how other houses in the market were doing and advice on how we could improve the success of selling our own home. Through that dedication we were able to sell our house remarkably fast and we sacrificed very little in the process. I cannot stress enough how thorough and involved Mary was, especially with answering all of our questions.

When it came time to buying our new house the decision to use Mary as our buying agent was an easy one.We ended up buying the house of our dreams and she negotiated the price saving us a substantial amount of money.

Working with Mary goes way beyond her expertise in the real estate industry. You can easily tell she enjoys her job and the challenges that come with it. She is very encouraging and charismatic and I would encourage anyone to work with her for buying or selling a home and the savings in commissions was a bonus.

Lisa and Mike G.

Sold in Wauwatosa/Bought in Pewaukee Using Homeowners Concept

SELLING REQUIRES THE PROPER STRATEGY.

2011-10-12T11:41:00.008-05:00

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. Homeowners Concept expert agents can assist you with recommendations.

SHOULD ONE REMODEL BEFORE SELLING?

2011-09-27T10:03:00.000-05:00

One of the biggest questions sellers ask agents when selling their home is: should I remodel my home before I sell?

You may have heard a number of stories about people who were able to command top dollar for their properties because they remodeled them. Although remodeling can, in fact, yield a higher asking price for your home, you must be careful when spending money on remodeling projects, as you may not always see sufficient return on your investment.

Generally a remodel will pay off but don’t assume that you will recoup all of your expenses, or even that you will see any of your investment returned to you. An experienced agent will be able to guide you on this (stick with experienced agents such as the ones employed by Homeowners Concept).

Below are some common mistakes to avoid when remodeling your home for sale:

Remodeling to suit your tastes – When remodeling, think like a buyer. In other words, you are remodeling to suit them, not yourself. Don’t remodel with taste-specific components; instead, keep it simple and neutral, thereby attracting the largest audience of buyers.
Overpricing yourself out of the area – You must pay very close attention to the high end of prices for your neighborhood. You will not be able to get any more money for your house, regardless of what improvements you have made if you go over the price ceiling. Before remodeling, look closely at recently sold properties and the updates they had. This will provide you with a good gauge when deciding which remodeling projects to undertake and how much to spend.
Emphasize kitchen or bathroom(s) remodel – Bottom line: the most important rooms of a home in today’s market are the bathrooms and the kitchen. These rooms have been shown to have the biggest influence on the price of a home; so, if you're on a budget, consider spending your remodeling dollars to update these rooms. They will yield higher returns on investment, provided you don’t go overboard in your remodeling efforts.

ONE OF MANY PRAISEWORTHY TESTIMONIALS

2011-09-07T14:25:00.000-05:00

I never considered selling my home with anyone other than a full service realtor with the usual 6% commission. It was my mindset and I didn't think of any alternatives. Because of that I called a 6% realtor and had one of their best known realtors come to my home. The price was a true low ball that she suggested I make the asking price. I was concerned about the service. I felt like just another potential commission. Then, believe it or not, a friend told me that her parents home was sold by Homeowners Concept. I called and talked with Mary who immediately made an appointment to come and see my home. Talk about day and night. First, she answered my questions candidly on the phone. She came to my home and explained the service to me. We listed shortly thereafter. I could not believe the work she put into the sale of my home. Seriously, ALL I had to do was show my home to the buyers without a realtor. We had a lock box for agents to use. Mary fielded all the calls, took care of the listing, put the sign in my yard, took wonderful pictures that were on her website & MLS, listed my home on the MLS and scheduled all the showings. Mary, while realistic, did not encourage me to lowball the price on my home. I would recommend her to anyone selling. She was meticulous, professional and incredibly efficient. All this and fun to work with as well. There is no one better!! Janet P.

MOST TRADITIONAL COMPANIES CHARGE HUNDREDS MORE IN ADMINISTARTIVE FEES ON TOP OF 6%!

2011-08-24T17:49:00.000-05:00

Did you know that most high commission companies charge an administrative fee of anywhere from $195 to as high as $599 at closing? THIS is above and beyond the 5%, 6% or 7% 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 in Greater Milwaukee that they figure what's a few hundred more. We have heard from sellers that have objected to the outrageous administrative fees with no satisfaction since companies cover these extra costs in the fine print.

Our administrative fee is the lowest in the industry at only $95 AND you pay much less commission AND have a truly skilled Realtor on your side all of the time (as opposed to some of the time - a subject covered in other posts).

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 the big spender why not take the savings and make a big donation to a favorite charity? Spending much more in unnecessary commissions can never make one feel as good as giving.

EVEN THE FOUNDER OF ForSaleByOwner.com SELLS USING A BROKER!!

2011-08-09T09:57:00.000-05:00

Former FSBO CEO sells home using a Realtor (reported in the AGBeat website: http://agentgenius.com/real-estate-news-events/forsalebyowner-com-founder-gives-up-on-own-listing-hires-real-estate-broker)

Founder and former CEO of ForSalebyOwner.com, Colby Sambrotto listed his 2,000 square foot New York condominium on his own through online classified ads and FSBO sites, but after six months, he opted to hire New York broker Jesse Buckler who immediately advised a price change as the listing was not attracting the right buyer.

After giving up on the FSBO route, Sambrotto’s decision to hire a broker led to attracting multiple offers, closing for $150,000 over the original asking price. The Wall Street Journal reports the listing sold for $2.15 million including a 6% commission.

Many FSBOs turn to Realtors

The news stands as an enormous validation of the real estate profession and while some may tease, it is no laughing matter and the former FSBO CEO made a good financial decision.

AGBeat columnist Herman Chan said, “If people want to take a stab at For Sale By Owner (ie FSBO), go for it. But well over 90% of FSBO’s eventually have to list with a real estate agent to get their house sold. It’s harder than it looks!”

The inability of FSBOs to sell completely on their own was the foundation of Homeowners Concept when we began in 1984. 27 years later and 23,000+ properties sold, Homeowners Concept has given home sellers a program they can successfully sell their property without a hefty commission.

5 YEAR ADJUSTABLE RATE MORTGAGES AT 3%!

2011-08-03T17:48:00.001-05:00

Many buyers are not aware of the extremely low Adjustable Rate Mortgages (ARM) available, specifically the 5 and 7 year. As of this writing one can lock in for a 7 year ARM for 3.4% rate. The 5 year is even better at 3%. These are conventional rates although FHA which offers lower downpayment and more flexible underwriting criteria is also offering low ARM rates. 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 AND would have paid off the loan much sooner). 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.

FOR SOME, DOING A SHORT SALE MAY BE THE BEST OPTION!

2011-07-26T10:21:00.003-05:00

For a homeowner that owes more money than the home is worth and needs to sell now, short sale is the best route. In a “normal” sale, the seller has money left over after paying closing costs, proration of taxes, liens and the outstanding balance of any loans/mortgages against the property. This money is known as “net equity”. Unfortunately, there are a growing number of sellers who, due to a variety of reasons, find that they owe more on the property than it is currently worth. They are “upside down” or have “negative” equity.

There are two ways to handle “negative” equity. First, if the seller had the funds available, he could pay off the negative equity by bringing money to closing. This way the lender gets paid in full and there are no adverse consequences to the seller’s credit rating. The second way is with a “short sale”. The assumption here is that the seller does not have the funds to make up the deficiency. It is also often that a seller in this situation has stopped making payments on his mortgage(s) and is suffering from a degraded credit rating because of this. Foreclosure would be the end result, if neither of these options are available.

Foreclosure should be avoided as it is worse than a short sale for the seller and the lender. The short sale closing impacts the seller's credit much less than a foreclosure. FNMA guidelines require a minimum of 2 years before one becomes eligible for a mortgage with a short sale on their record. It is 5 years minimum with a foreclosure. For the lenders, selling a property short is better than foreclosure because of time and cost savings.

You might wonder why lenders are so eager to take such a huge discount, so you have to consider the nature of the banking business. Some lenders report that if the home goes into foreclosure by the time the home actually closes with the new buyer the lender will be lucky to have netted 50% of the original loan balance.

What‘s the bottom line from the lenders perspective? They are in the business of lending money, not owning homes. If they can accept a short sale offer and rid themselves of the bad loan AND net more versus the home going into foreclosure…they will do it every time. It‘s simply smart business for them.

There are a number of hoops however one has to jump through in order to get the short sale approved by the bank and ultimately close. For a successful short sale, it is necessary to employ a veteran agent - as all the Homeowners Concept agents are. There is technical skill involved in knowing how to price the property, write the contract, and ultimately assemble and deliver a good “package,” providing all the information that the lender will need to make their decision. Each lender has a different “punch-list” of documents that they require. There's definitely more work involved in a short sale but it is good for all: sellers, buyers and lenders.

HOW PAYING LESS COMMISSION MAKES THE SALE POSSIBLE.

2011-07-15T10:13:00.002-05:00

This Cudahy home on Rosewood Dr had been with Homeowners Concept for a number of months but had switched to a 6% broker after it expired unsold. During the time it was listed we had 3 offers from 3 different buyers but all where for a price that was unacceptable to the seller.

The first offer was the highest for about $205,000 but sellers felt that "they were not going to give it away" (they were priced at $219,900). A couple of months later sellers reduced the advertised price to $209,900 and another offer came in for just under $200,000. Again sellers rejected it as inadequate. After a period of time a third offer came in even lower than the first two offers. Despite the writing on the wall, the sellers refused to accept reality. About this time the listing came up for expiration and to our amazement sellers wanted to try a "high commission" broker and pay thousands of dollars more in commission and administrative fees.

After a few weeks with the new broker, sellers reduced their price to under $200,000 (and willing to pay 6% on top of it). The buyer with the 3rd offer was made aware of the reduction and was willing to redraft the offer now that the sellers had come to grips with pricing. The new offer was finally accepted and because buyer had been found during the time with Homeowners Concept, the commission to seller fell under our 1.5% commission (buyer was an exclusion to their new listing with the high commission broker). Sellers were very lucky that the buyer had not found a property and as a result we were able to put the deal together and save them a big chunk of the 6% commission.

In summary, most sellers rely on our expertise (and we do have much more expertise than the average high commission agents) especially important in the real estate environment that we are in. Every so often though some sellers refuse to listen to facts and market data. And by paying much more commission makes absolutely no difference to a buyer as these sellers found out. Cases such as this have happened to us before (we have been saving sellers the huge commission for 26 years now and sold tens of thousands of homes). We even have had a few situations whereby Homeowners Concept brought the buyer to the table after the sellers had switched to a 6% broker. In those cases sellers paid 6% and Homeowners Concept was paid MORE than our low fee (we got paid the co-broke commission since we brought the buyer - 2.4% on average -).

PAYING 6% RESULTS IN MANY BROKERS LAUGHING ALL THE WAY TO THE BANK.

2011-07-06T17:34:00.003-05:00

Real estate brokers collected $42 Billion last year in commissions. But it could've been much less if all sellers used a program similar to Homeowners Concept. It's a statement we can make with certainty having sold upwards of 23,000 properties since 1984.

Our program has been proven unequivocally to be extremely successful and actually work better than paying a 6% commission. There have been hundreds of instances over the years that our lower commission made the difference in the sale of the home. The thousands in savings and no excessive administrative fees at closing have helped considerably. Couple the savings with all the expertise we bring to the table (only full time, seasoned, incredibly knowledgeable Realtors) and one can see that paying more than our top of the line 4.4% program is a pure waste of someone's hard earned equity.

Bottom line is that if you're paying more than our top of the line 4.4% program you are absolutely paying too much to sell!

UNBELIEVABLE!

2011-06-15T13:04:00.001-05:00

Paying $500 Upfront PLUS $100 per month until the home sells, THEN pay another 3% at closing. That's exactly what some sellers are doing by listing with this local limited service turned into a full service company. A client of ours at S108 W39570 Oregon Trail in Eagle paid $500 upfront in April of 2010. At the end of April 2011 she was on the hook for another $1,200 and no sale (a total of $1,700 with no results)! That's when she had enough and quit the service.

Unfortunately for this seller and many others she was hoping for a quick sale and she figured that maybe the $500 upfront and another $200 to $300 accumulated by the time of a sale would be enough. What sellers do not take into account is the fact that this company is running about 70% expiration rate. In other words 7 out of 10 properties expire unsold. All the hundreds or thousands of dollars each and every seller pays upfront is lost. Gambling at a casino has much better odds.

Even the lucky sellers that sell via this method they still have to pay 3% additional at closing. Assuming 6 months of selling time ($1,200) plus 3% (for an average priced home of $200,000) the total is around 3.6%. Since the company makes money regardless, there is little incentive to try to move the properties expeditiously. One though MUST factor in the 70% that do NOT sell and the money invested by those sellers.

There is a great amount of ignorance on the part of the sellers that sign up for this outrageous selling plan. One can see paying hundreds or thousands of dollars upfront and maybe pay a few hundreds more at closing provided one had the same chance of selling as competing methods. But to pay all this money upfront without any guarantee of a sale whatsoever and get hit with a 3% additional at closing makes absolutely no sense.

You know someone who's a Realtor but do not want to list w/them.

2011-06-07T10:56:00.001-05:00

We recently had a seller that was absolutely getting the value and savings of our program but was in a quandary on how to deal with a sister in law who is also in real estate and wanted his business but of course was charging more and offering less than Homeowners Concept.

As we have written in the past, it is quite common for sellers to know someone in real estate (there are way too many agents for the amount of sales). This could be a relative, a friend, or even the agent that sold them the home. However, the more sellers (or buyers, for that matter) investigate Homeowners Concept, the more they want to work with us. The savings in commissions is certainly a consideration but the fact that we bring to the table many more years of expertise and a high volume of sales than the average agent trumps the competition.

In this case, the sister in law has only been in business for 4 years and last year only closed 4 homes - a little less than average - and much, much less than an average Homeowners Concept agent. With our suggestion, the seller offered his sister in law an incentive that if she rounds up a buyer for him he will pay her a bonus commission (which in effect will be double the commission cut she was going to receive from her broker). This works like a charm and sellers get to keep the relationship/friendship intact and enjoy listing commission savings plus higher expertise! Of tens of the times this has been offered by sellers in the past it has never come to pass. Nevertheless, true friends/relatives understand business and the fact that you need the profit for themselves and family.

MORE BUYERS ARE DITCHING THEIR AGENTS AND SHOP ON THEIR OWN

2011-05-24T09:43:00.002-05:00

Home Buyers go hunting alone by rejecting the services of a buyer's agent.

The buyers who purchased a property through a real estate agent just 57% had buyer representation in 2010, according to a report by the National Association of Realtors. That's down from 62% in 2009 and 64% in 2006, before the housing bust.

Also, fewer buyers are first learning about the home they purchase from real estate agents: just 37% are reporting real estate agents as their first source of information on the home they purchased, down from 50% a decade ago, according to NAR.

Bottom line: The trend is that U.S. home buyers are doing it themselves with the help of the internet and smart phones.

After years of trepidation, home buyers are finally beginning to wade back into the housing market. But as they do, many are making the surprising choice to hunt alone, rejecting the assistance of what's known in real estate as a buyer's agent. Smart home sellers that use companies like Homeowners Concept benefit the most from this trend by not having to pay a buyer's agent.

SELLER LEVELS OF MOTIVATION

2011-05-19T11:18:00.004-05:00

Understanding Home Sellers

With nearly 55% of the homes on the market failing to sell in the first 6 months on the market, it is important for a prospective home buyer to understand that there are home sellers out there with different levels of motivation. Choosing the sellers with the highest motivation will allow the buyer to make a safe purchase in today’s real estate market.

I like to classify seller motivation levels in three distinctly different categories:

Considering Selling – This homeowner does not really need to sell the home. If they can get their price, they will sell. If not, they will stay in their home. This type of homeowner will not sell their home in today’s market, so home buyers who actually view the property are just wasting time.
Want to Sell – This homeowner has a real need to sell, but has not priced the home correctly for one of many possible reasons. Often times, this homeowner feels as if they have plenty of time to sell, so they are “starting high and will lower the price if it does not sell.” Due to the extreme glut of homes on the market, this homeowner will most likely join the ranks of the 55% “Failed To Sell” group.
Must Sell – This homeowner absolutely must sell the home, and the asking price of the property for sale demonstrates this. It is the best buy in its category, and all realistic home buyers view the house. This home has an excellent chance of selling, even in a difficult real estate market.

LIMITED SERVICE BROKERS ARE DISAPPEARING AS SELLERS WISE UP.

2011-05-10T18:24:00.001-05:00

In just a few years we have witnessed the birth, explosion and demise of the Limited Service brokers. Limited Service is just that. They put your home in MLS for hundreds of dollars UPFRONT but you're still selling the property on your own. If another agent brings the buyer you must pay the other agent in addition to having someone else like an attorney or another agent represent your side. The sellers that sold homes this way paid, on average, about 3.6% when all said and done. What became evident rather quickly though, was that very few sellers could sell this way (only 1 in 4 sellers were successful in the last 3 years) for various reasons that I have explained in past blog posts.

As more and more of these homes listed with limited service would go unsold, home sellers started to wise up. Why pay hundreds of dollars UPFRONT when you have such a low, low probability of selling via this method? Unfortunately a lot of sellers found out the hard way that the limited service model does not work after wasting months and years on the market without success. We have estimated that sellers have spent well over $1.1 million dollars in upfront fees in Metro Milwaukee, without selling their home this way.

As a result, a number of these outfits have closed doors and the rest have considerably less home sellers willing to part with hundreds of dollars Upfront. One of the top 2 outfits completely converted to a full service model. The other offers full service in addition to limited but suggests right on their website that limited service decreases the marketability of the home!

So, it appears that the explosion in limited service way of selling a home was merely a fad just like we saw with the advent of the internet and the For Sale By Owner websites. It proves once again that selling a property requires proper marketing and a skilled agent to make it happen (most of the time).

HOW DAYS ON THE MARKET CAN BE MISLEADING.

2011-04-25T10:32:00.001-05:00

We often hear “how long does it take to sell a home?” This is a touchy subject. The short answer of course is that with appropriate liquidity in the market it is “a couple of weeks”, but there's more to that.

First of all, selling a home is not rocket science. All you really have to do is tell the people who are ready to buy a home that you have one that they will like. If it is better priced compared to the competition, buyers would want to see it. If it shows well, one or more buyers would most likely write an Offer. With the right agent a sale will ensue. So the key to selling a home is to know where the buyers are, price the home to be attractive, promote the home to those ready buyers and have an expert agent on your side to negotiate and iron out issues so that the sale happens.

We know that 94% of homebuyers are using the internet to identify a home, and we know the processes that they are undergoing in their efforts to buy a home. So the market time (which is the answer to how long does it take to sell a home) is the time that it takes to fully expose a home to this buying audience (not shoppers or lookers but actual BUYERS). Thanks to the internet, this is usually 5-10 days.

Liquidity Matters When Selling A Home

There are times and price ranges where liquidity in the market might extend this market time, sometimes considerably. For example, if you have a $1.5M home to sell, and your market area only sees two sales in this price range every year, it might take a while for that buyer to come along. But when you see multiple buyers in a price range each month, enough liquidity exists for a quick sale.

You can determine liquidity by examining the active listings and the number of recent sales in your market area for your type of property. A good agent can provide that information and any of our agents excel at that. Supply and demand is a critical component of any market, and one should not try to sell a home without a solid understanding of where they fit into the market.

So to summarize, with proper liquidity and a targeted marketing plan, market time (or days on the market) for most homes is 2-3 weeks. For most properties, anything longer than that is due to a lack of information or lack of motivation on the part of the home seller (and anybody involved advising them on the sale of their home).

Measuring Days On Market (DOM)

It is misleading when a real estate agent reports “it takes 75 days for a home in this price range to sell.” Most agents look at “average market time” and think it is a valid measurement of how long does it take to sell a home. It is not.

When somebody gathers up a group of properties and determines an average of this, what they are really reporting is the average marketing time it took to sell a group of houses based upon the last time the property was listed in the MLS. Maybe an example would make this clear:

Mr and Mrs Miller listed their home “For Sale By Owner” for 30 days to try to sell it on their own. They had no luck (as one would know reading this blog) so they hired Broker A to sell their home. The home was listed for 6 months with Broker A and the property failed to sell. The Millers listed with Broker B and probably after some reduction in price, the property sold in 50 days. So, the MLS report would show a market time of 50 days!

Total time on the market for the Millers though was:

30 days “For Sale By Owner”
180 days with Broker A
50 days with Broker B
This is a total of 260 days, yet the MLS would report it as “50 days.” There is a way to find out the cumulative Days on the Market but an agent has to do a more comprehensive analysis of the MLS data (of course, our agents do this more intensive step).

Worst of all, what about the days on the market for all the homes that failed to sell. What if in our scenario the Miller’s home never sold? How would those days be factored into the mix? The facts on market timing are just a bunch of mis-measured time frames thrown into a pot and boiled. If liquidity is abundant, the home will sell when enough of the buying market sees it, and a well run marketing campaign will achieve that in a couple of weeks.

TAX BENEFITS OF OWNING VS RENTING.

2011-04-12T13:46:00.001-05:00

When it comes to the tax benefits of renting vs buying, the benefits of buying far outweigh the benefits of renting.

Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.

In Wisconsin and depending on a buyer's bracket, this deduction can reduce the cost of borrowing by one-third or more.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.

Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don't get.

Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit -- $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.

14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns.

Tax benefits of renting:

The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes.

Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction.

Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in higher tax states like Wisconsin get the most benefit.

"FOR SALE BY OWNER" IS A LOSING GAME.

2011-03-30T17:33:00.007-05:00

Even though selling as a pure For Sale By Owner (FSBO) can be the cheapest way to sell, it is BY FAR the least successful method. The last year that a national survey was performed (2009) showed that only 9% sold this way and we're sure some of them actually had to pay a Buyer's Agent (ultimately paying closer to 3%) to sell. Of the 32 FSBOs that we tracked in Metro Milwaukee in 2009 and 2010 only 2 did not convert to sell with a Realtor at some point and may have sold as a FSBO (4 converted to our program).

The very reason we exist is a result of FSBOs. It was winter of 1984 when our founder walked away from buying a For Sale By Owner (FSBO) after he realized the Buyer's legal cost and time away from work necessary to meet with a lawyer (lawyers are fond of meeting after business hours). He wondered how many other buyers walk away from buying a FSBO if Realtor assisted homes are easier to make offers on. A little research at the central library consisted of calling 100 FSBOs from the newspaper ads of 3-6 months before, showed that very few sellers were successful (at that time only 12% of FSBOs were able to sell without any Realtor help). The success number is dismally low. It was then that he realized that there has to be a better way for real estate to be sold and Homeowners Concept was born as the "missing link" for FSBOs to achieve the Realtor advantages without the hefty commissions.

It is the time one loses trying to sell as a FSBO (usually 9-12 weeks) that damages the home's chance of getting sold at its highest price. It is the buyers' reluctance to enter negotiations with the seller directly and spend hundreds if not thousands of dollars in legal fees plus maneuver through the transaction on their own that dooms the FSBOs. With the high inventory of homes for sale, buyers do no want to spend ($500+ upfront ) on a retainer to make an Offer to a seller. If the Offer does not go together the retainer is gone. If any issues come up during negotiations or inspection or thereafter it is more money the buyers are on the hook for. Can you blame Buyers for skipping buying a FSBO?

One of the fallacies sellers have is that a buyer will use "their" lawyer to do the buyer contract, counters, amendments, etc. That is extremely rare as buyers are reluctant to go to the seller's attorney. Keep in mind that attorneys list their homes with Realtors at the same rate as any other profession (they know better). Over the years we have had hundreds of sellers who were trying it on their own, turn to our company and within a number of days to a few weeks get an accepted offer as a result of us being involved.

Some FSBO sellers employ a limited service company to go in MLS by paying hundreds of dollars upfront but what all of these sellers are not aware of is the fact that there is a 74% failure rate (2009-2010). In other words, after months or years on the market 74% of those sellers have to employ another Realtor to sell. Sellers have wasted millions of dollars (just in Greater Milwaukee) in the past few years trying out this method. The main reason for the low success rate is that the agents that put them in MLS get PAID UPFRONT - they could care less if the seller sells or not. These outfits are known in the industry is "list them and forget them". Already some of these companies are seen year of year declines in the amount of "sucker" sellers.

With our 1.5% commission there is absolutely no reason why anyone would want to attempt selling FSBO in this market. If sellers knew all the facts, they would never resort to sell a property as a FSBO not as long as companies like ours are around.

BEWARE OF BUYERS THAT ARE NOT PROPERLY APPROVED.

2011-03-23T09:18:00.000-05:00

Homesellers need to be wary of prequalified homebuyers who appear as if they're ready, willing, and able to buy a property because unless buyers are properly preapproved by the right institution, problems could arise during the transaction.

Often, the terms “prequalified” and “preapproved” are used interchangeably and this is a gross oversight when it occurs. While there are various interpretations and definitions of either term, experienced real estate professionals want homesellers and homebuyers alike to know that when applying for a mortgage loan, there is a huge difference between pre-qualification and pre-approval!

When a homebuyer has been prequalified, it simply means that a lender has provided an estimate of what the buyer can afford, based upon the information that the lender was given.
Buyer has been interviewed by a reputable mortgage lender and buyer has provided information on income, assets, debts, and down payment. The lender provides an opinion of the buyer’s potential based upon the information provided.

When a homebuyer has been preapproved, a more thorough process has been followed. A pre-approval is a conditional commitment to receive a loan. Buyer has submitted a full loan application to include a credit check, paying an application fee, a completed FNMA Form. Lender has verified income, assets, debts, and down payment The lender provides an approval letter indicating an amount and remaining conditions to be met (such as appraisal, title, etc.)

A pre-approval is far more desirable than a pre-qualification, but it is still no guarantee that the buyer will get a loan. Experience shows that mortgage brokers have a much higher probability of closing on a loan than a bank or a credit union (see post of 1/14/2011). At Homeowners Concept and because of our high volume of sales we have a running list of the best lenders in Metro Milwaukee.

SHOULD THIS BROKER HAVE PRICED THIS HOME THAT LOW?.

2011-02-24T10:16:00.006-06:00

The seller of this home at 1660 Stephan Lane in Sullivan, went first on the market with Shorewest Realtors for $325,000 in April of 2009. After a full year on the market the seller had reduced to $305,000 with no sale.

We took over the listing in April 2010 at $295,000 and after 3 months on the market we had a Offer that was contingent on the sale of the buyers' property for $260,000. The equity that the buyers needed to purchase the home on Stephan Lane was tied up in the buyers' home. Unfortunately the buyers had little room to move on the price of their home and were unable to sell in time and move up to the home on Stephan Lane.

What happened next though is quite a shocker. At the end of 2010 the seller was pressured to list with another agent "someone his kids were recommending". Sure enough in January of 2011 the seller listed the property with Realty Executives at a price - here it comes: - $200,000 AND paying more in commission and closing costs! $75,000 BELOW the last price and $60,000 below the contingent Offer! Granted it is not unusual for a seller to reduce after switching brokers but a 27% reduction especially when one has an offer for much, much higher is to say the least, unheard of. Furthermore, we had gone through a very slow Summer and Fall due to the expiration of the buyer credit. Sales pick up considerably after the holidays. So a good agent would have suggested to the seller to reduce somewhat and watch for the market reaction as showings and sales pick up. None of this happened of course. The seller said to us afterwards that his kids wanted him to unload the property.

As one would expect after a couple of weeks with the new fire sale price the home was under contract and recently closed. Did the broker do the seller justice? Even if the seller had a possible "mental breakdown" is it ethical for a broker to just take advantage of the situation and get the quick sale? I can certainly state that in 27 years in business, we have never taken an expired listing over and had anywhere close to such a dramatic reduction. Knowing what we know about the previous offer and going into the best time of the year makes this reduction obscene and the broker possibly not serving the best interests of the seller.

There have been cases where sellers have been very low on their perceived market price. If the market analysis shows higher, with the sellers' approval, we have marketed homes and ultimately gotten more than the sellers originally thought. Many clients refer to us as the Good Guys not only because we save sellers on commissions and closing costs but by also doing what is necessary to maximize sellers' net amount. Actions by few brokers as in this case, give the industry a bad name.

STILL TOO MANY AGENTS IN THE MARKETPLACE.

2011-02-17T11:47:00.005-06:00

This graph by the National Association of Realtors shows that as of the end of 2010 the number of agents nationwide stand about 37% higher than the number of agents before the real estate bubble began (2001). Although it has peaked and it is sloping down there is still a tremendous amount of real estate agents in the market vying for sellers and buyers.

This is a subject that I have touched upon before that even though the number of sales have reverted back to pre bubble years the number of agents have not. This issue leaves many sellers and buyers to work with sub par agents. In metro Milwaukee the average agent closed just shy of 5 transactions last year. That's barely one sale every other month, hardly enough for gain or maintain real estate expertise.

The reason for so many agents is that the traditional, hefty commission companies push for this by continuing to hire unsuspecting agents. You see, besides some initial training, there is no ongoing expense on the real estate office. Furthermore having as many bodies around only helps the bottom line. Not only does the office can count on the occasional friend or relative who would work with the rookies but the companies also pay these low production agents less commission (split). Each brokerage has a few high volume agents and they're paid higher splits sometimes as high as 80% of the commission earned. The army of agents who do very few deals a year get usually only 50% or less of the commission.

We are one of an extremely few real estate companies in the country and to my knowledge the only one in Metro-Milwaukee that do not operate this way. We maintain the high volume sales production per agent by not adding to our roster at our low attrition rate. We want all our clients to be working with a top selling Realtor who has been in business many more years than the average agent (17 years vs 4.5).

The real estate profession should eventually change, as consumers become more aware of the issues, to a more efficient and effective program such as ours. Fewer agents who negotiate and close a lot of sales each year, who are extremely proficient in real estate yet charge a low commission but enough to make a decent living.

TOP 5 TRENDS IN REAL ESTATE.

2011-02-04T10:45:00.001-06:00

Top 5 Trends in this Real Estate Environment:

1) The amount of commissions agents charge. Reduced commission models are sweeping the nation. Our 1.5% listing offers sellers 30 points of marketing, more than is normally provided by a traditional “full-service” agent. Couple that with the fact that our agents sell many more homes/year than the average agent and have been in business 17 years vs 4.5 and you have a winner. On the other hand, we understand that some people do prefer the traditional model where the agent does the showings and that is why we offer the 4.4% program.

2) The use of technology as a means to do more for less. Companies like ours have used technology and the economies of scale provided by a high-volume based business model to offer homeowners massive exposure at lower costs to market their homes. Sellers who are savvy and who want to remain empowered during the home selling process naturally gravitate to this model, because they are knowledgeable enough to know that it gives them the best chance of selling.

3) Flexibility to allow clients to participate in the home selling or home buying process. Another great component of this growing realty model, is that we allow our sellers to show their own properties and if the buyer comes in without an agent, pay just the 1.5% just like thousands in Metro Milwaukee have done. Sometimes the thousands of dollars saved in commissions could make the difference between a home selling or not. In this market, a seller can afford to price the home outright better than the competition or offer concessions to the buyer to make the transaction work.

4) The number of inexperienced, unethical and just plain inept agents being culled from the ranks of the real estate industry is on the rise because the effects of a prolonged, tightening economy. The part-timers, novices and those agents that really don’t know what they are doing are being forced out of the business by market constraints allowing having more proficient professionals being left to steer and grow the industry as a whole.

5) The power of the Internet is vital in marketing properties. The first time someone sees your property is not when they visit it in person anymore. The first time they see a home is on the web. To make a great first impression and to entice buyers to come to your home you must have great pictures. If you are listed today and you think the pictures your agent has provided are ugly and make the house look unattractive, so does everyone else. Just another reason why it is essential to have your home in as much exposure on the net as possible and make sure it appears as the best product it can be.

The new and more innovative ways of getting out the message and the flexibily one can have by not paying a high commission can mean the difference between a home selling in a reasonable time and for a decent price and one languishing on the market.

7 HOMES SOLD WITH HOMEOWNERS CONCEPT!

2011-01-25T15:00:00.008-06:00

At first we did not realize that Homeowners Concept had Licensed Realtors as their agents. We found out during our first sale that their agents sell a lot of homes, many more than your average broker. We have listed 7 homes and condos with Homeowners Concept in the last 22 years and have saved thousands of dollars on each sale! Plus they don't charge any extra fees other brokers tack on. Each transaction with Homeowners Concept allowed us to "move up the real estate ladder" buying a more expensive home.

Our 2 agents have been highly skilled as you would expect. When we sold a home in Whitefish Bay our agent ironed out a number of issues with the inspection and occupancy. This saved us valuable time during the peak market season. When we had a cash buyer for a condo we owned in Pewaukee our agent got a bank letter to verify the buyer’s funds. Again, we did not turn other buyers away if this buyer was not qualified. Their agents know how to move fast and efficiently so that sellers can close quickly.

Since buying and selling with Homeowners Concept, we have saved tens of thousands of dollars that would have been paid in realtor fees. Why get burned twice in this current real estate market? You will get burned the first time by the poor market and you will get burned twice with the high 6% commission typical of other realtors.

We are now in our dream home but, when it is time to sell again you can bet we will be on the phone calling Homeowners Concept.

Barbara and Dr. Bob C.

WHY A MORTGAGE LENDER IS BETTER THAN A BANK OR CREDIT UNION

2011-01-14T12:34:00.002-06:00

The mortgage industry has seen major changes in the last few years. Underwriting standards have tightened up and seem to vary considerably between banks and other major lenders. As a result, when a buyer who is dealing with just one lender (be it a bank or a credit union) has no where else to turn should the underwriter of that institution come up with a rejection or conditions for the loan .

Mortgage brokers though, have a clear advantage in that they have multiple lenders/underwriters they can place the loan with. Interestingly, one can get 1/8 to 1/4% better rate with a mortgage broker due to the number of lenders competing. Homeowners Concept has had a great relationship with NetCentral Mortgage (NCM) for their extremely high reliability. In one recent case we had a buyer that was preapproved for 5% down with a bank but a few days before closing the underwriter demanded 20%. Buyer took the file away from the bank, placed it with NCM and was able to close with only 5% down. In another case the bank required the buyer to repair a major item on the property even though the buyer's downpayment was 30%. NCM got the loan approved with no issues.

Buyers and sellers want a "close to 100%" probability that the loan will get approved and for the same rate and conditions as when it was originated. Our vast experience shows that mortgage brokers absolutely offer the best odds of getting a loan through and in a hassle free way. NetCentral Mortgage can be found at NetCentralMortgage.com or at 414-258-7778.

Selecting a Top Realtor is Key to a Successful Sale.

2011-01-07T15:28:00.001-06:00

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.

Another Glowing Testimonial

2010-12-10T11:36:00.004-06:00

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...

2010-11-26T15:12:00.001-06:00

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

2010-11-15T11:04:00.001-06:00

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.

2010-10-13T16:22:00.002-05:00

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!

2010-09-27T10:40:00.000-05:00

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.

2010-08-24T18:35:00.005-05:00

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.

2010-08-19T10:55:00.002-05:00

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

2010-08-03T10:36:00.001-05:00

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%

2010-07-27T10:16:00.000-05:00

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?

2010-07-21T10:51:00.003-05:00

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.

2010-06-24T10:09:00.002-05:00

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

Striking a Balance

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

2010-06-11T13:26:00.001-05:00

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.

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 ….”
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.
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.

2010-06-01T15:00:00.000-05:00

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!

2010-05-26T14:51:00.000-05:00

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!

2010-05-19T13:18:00.009-05:00

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.

2010-05-09T21:37:00.006-05:00

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!

2010-05-05T09:52:00.004-05:00

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?

2010-04-23T13:47:00.002-05:00

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!

2010-04-10T10:00:00.001-05:00

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.

2010-04-06T10:30:00.004-05:00

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!

2010-04-01T12:20:00.004-05:00

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!

2010-03-24T22:21:00.004-05:00

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.

2010-03-15T09:00:00.004-05:00

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.

2010-03-02T10:39:00.002-06:00

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.

2010-02-12T13:21:00.002-06:00

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.

2010-01-26T16:46:00.000-06:00

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

2010-01-07T08:00:00.000-06:00

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

HAPPY, HEALTHY AND PROSPEROUS NEW YEAR!

2009-12-25T09:50:00.001-06:00

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

2009-12-16T15:23:00.009-06:00

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 on 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% 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.

Putting off buying could be a mistake.

2009-12-03T14:22:00.007-06:00

Many buyers have put off buying due to the holidays and the cold weather. First time homebuyers eligible for the tax credit have also put off the decision to buy now that the program was extended until April 30th, 2010. Delaying buying a home though until Spring could be a mistake for the following two reasons.

As some of you know, the Federal Reserve has been buying mortgage obligations for the past few months which has artificially kept rates low. The Fed has recently indicated that this program will be coming to an end. Consequently, expect the rates to slowly creep up to a level of around 6%.

Another reason not to delay buying is the anticipated demand for houses always goes up after the holidays. As demand increases early in 2010 and this time accelerates as we get closer to the April 30th deadline, buyers can lose the home of their dreams or pay more for it than today.

Paying 6%? You're also paying up to $595 extra at closing.

2009-11-23T10:45:00.003-06:00

Most high commission companies charge an administrative fee as high as $595 at closing. THIS is ABOVE and beyond the 5%, 6% or 7% commission one pays with these companies. Of all the large real estate companies, Homeowners Concept is the only one that invoices a low $95 administrative fee (actually the fee is charged by the Title company - anything charged over that goes to the broker).

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. 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. And even if one wants to be a big spender 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 and excessive administrative fees.

PAYING A HIGHER COMMISSION WAS A COMPLETE WASTE OF MONEY.

2009-11-12T15:06:00.002-06:00

This property at 1813 N. 56th in Washington Heights was listed with Homeowners Concept until 9/30/08 when it expired at $249,900. Our very successful agent tried repeatedly to get seller to pay attention to the declining market, to no avail (yes, despite our 25 yr expertise in the market, some sellers have a tough time coming to grips with the current market). After a couple of months off market she listed with a First Weber agent who had sold only one other property in the last 12 months, MLS #1057682 (there are some sellers that for some reason believe that another less successful, less seasoned broker will do a better job...?). Seller proceeded to do a number of price reductions all the way down to $214,900 by late September, 2009.

At that price, a Homeowners Concept Realtor who was working with a buyer showed the property and got an Accepted Offer for $208,000. Eventually Homeowners Concept sold the property and seller paid a much higher commission to us via the "co-broke" of 2.4% (this actually came out of the listing broker's 6% commission). That is about $1,872 more the seller had to pay to us plus an additional $7,488 to the listing broker for a total of $9,360 more than our 1.5% commission.

The irony of this very real transaction is that by backing away from Homeowners Concept's overwhelming and successful record of 25 years, this seller found out that the market controls the price the home sells for. The seller only has control of how much commission one pays. Had the seller stayed with Homeowners Concept this seller would have walked away with $9,360 more at closing. Buyer would have paid the same amount for the home regardless!

Which seller are you?

2009-11-05T15:00:00.001-06:00

Getting your home sold in SE-WI right now, is not as tough as you might think despite the market. 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

Your Motivation To Sell A Home.

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

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 ….”
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.
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?

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. A serious seller can take the savings and deduct it from the list price making their home much more attractive to buyers.

THE SAVINGS IN COMMISSIONS IS YOUR BONUS

2009-10-26T16:42:00.003-05:00

25 years ago Homeowners Concept started as a real estate office to save sellers the huge 5, 6 or 7% commission. Today Homeowners Concept has evolved into a company where sellers can turn to for great service, top notch real estate expertise and great marketing. The savings in commissions is really a bonus.

Over the years we have developed a program that we can guarantee as the most efficient and effective way for selling homes. We have done this by providing more in marketing properties (having the most widely distributed homes magazine and a great website, among others) and having highly skilled, full time, long term agents who are truly dedicated to real estate. You see, the traditional high commission model of just hiring agents regardless whether the business is there or not saddles the system with mediocre agents who spend most of their time competing with each other offering the same thing and charging 5-6% commissions (see post of 8/26/09). There are way too many agents for the amount of sales and one can understand why the average agent does only a few deals a year and has just a few years in business. We on the other hand, limit the hiring to just the best in the business so our Realtors do a lot of sales saving you money from excessive commissions.

When you work with Homeowners Concept, you work with some of the most successful and most active agents in the area. Our Realtors know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals. The savings in commissions again is your bonus.

The futile way of selling FSBO

2009-10-21T17:25:00.001-05:00

The very reason we exist is a result of For Sale By Owners (FSBO). It was early 1984 when our founder walked away from buying a For Sale By Owner (FSBO) after he realized the legal cost involved and time away from work necessary to meet with a lawyer during business hours. He wondered how many other buyers walk away from buying a FSBO if Realtor assisted homes are easier to get. A little research at the central library consisted of calling 100 FSBOs from the newspaper ads of 3-5 months before, showed that very few sellers were successful (at that time only 12% of FSBOs were able to sell without any Realtor help - most recent national survey shows that only 9% are successful). Either way these numbers are dismally low. It was then that he realized that there has to be a better way for real estate to be sold and our Concept was born as the "missing link" for FSBOs to achieve the Realtor advantages without the hefty commissions.

This year alone we have tracked FSBOs in Wauwatosa (one of the healthiest in sales in the metro area). So far only one home out of 14 has sold this way. All others have turned to Realtors and 2 w/Homeowners Concept - one of which has sold, the other is pending.

Ordinarily, FSBO is the cheapest way to sell most of the time BUT that is only if you sell (although there have been cases where FSBOs have spent far more than our fee, mainly on attorney costs). Factoring in the extremely low probability of selling as a FSBO the cost of selling is substantially higher. It is the time one loses trying as a FSBO (usually 8-9 weeks) that damages the home's chance of getting sold at its highest price plus the money a FSBO spends on marketing. It is the buyers' reluctance to enter negotiations with the seller directly and spend hundreds if not thousands of dollars in legal fees plus maneuver through the transaction on their own that dooms the FSBOs. One of the fallacies sellers have is that a buyer will use "their" lawyer to do the buyer contract, counters, amendments, etc. That is extremely rare and besides, attorneys list their homes with Realtors at the same rate as any other profession (they know better). Over the years we have had hundreds of sellers who were trying completely on their own, then turn to our company and within a number of days to a few weeks got an accepted offer as a result of having someone the buyers could turn to.

Every year, $100s of millions of dollars are wasted by sellers trying to sell as a FSBO before they turn their home over to a Realtor to eventually sell it. If sellers knew all the facts, they would never resort to sell a property as a FSBO not as long as companies like ours are around.

Mortgage information you should be aware of.

2009-10-09T10:51:00.002-05:00

More than ever we are finding that a mortgage banker has many more options to finance a purchase than a direct lender such as a bank, mortgage company or credit union. Just in the past few days we had 2 loans approved that had been rejected at a local direct lender.

The first was an FHA loan for a Wauwatosa home that Bank of America will not approve due to issues on the condition report which the buyer was accepting. Our preferred mortgage Banker Netcentral Mortgage placed the loan with a lender that does not require the condition report.

The second buyer was not getting approved for a Waukesha condo at Westbury Bank due to an association assessment. Again Netcentral Mortgage was able to place the loan with an underwriter that accepted the assessment restriction.

We suggest to buyers to avoid hassles, delays and even rejection of their loan by using a reputable mortgage banker. Mortgage bankers work with multiple lenders and know which underwriter will approve what. Furthermore, a mortgage bankers oftentimes have better rates or closings costs as different banks compete for loans. Netcentral Mortgage has beat or reduced closing costs for many buyers over the years.

Another successful, highly skilled Realtor joins Homeowners

2009-10-02T13:15:00.003-05:00

This week, Kim Wagner previously with Shorewest and Coldwell Banker joined our company. Readers of this blog and people familiar with Homeowners Concept know that we only hire experienced agents with many years in business, in other words the cream of the crop. Our agents sell 3-4 times more homes per year than the average agent and have been in business 17 years vs 4.5 for the avg agent. Kim has been in real estate for 14 years and has been a top agent for practically all of those years.

Kim offered: "I am excited that I was able to pass the stringent requirements and join Homeowners Concept. This is a company with a 25 year history of providing real estate expertise, superior marketing without charging a premium. They have figured out a system that best serves buyers and sellers and I am glad to be a part of such a progressive company. I love that I can give sellers real options, that I can assist them for 1.5% or give them the same service just like I did at the other companies for a low 4.4% but with more marketing."

Our clients can be rest assured that they are in very good hands with any of our Real Estate Professionals at Homeowners Concept. You see, unlike most traditional companies that hire just anyone with a license (see the post of 8/26/09 for complete details), we are very selective. We continue to offer our clients much more service and real estate expertise than one can expect from paying 6%. The savings in commissions is a bonus!

A recent testimonial letter says it all

2009-09-18T10:36:00.004-05:00

From the beginning Mary gave us straight-forward facts about our home sale. Unlike some of her competitors, she wasn’t telling us what we wanted to hear; she gave us a clear understanding of what our house was worth and what we could get for it. Together we came up with a “game plan” for how we were going to tackle our home sale. We really appreciated this type of approach because it left no mystery to how we were going to handle things going forward.

When it came time to buying our new house the decision to use Mary as our buying agent was an easy one. We ended up buying the house of our dreams and she negotiated the price saving us a substantial amount of money.

Lisa and Mike G.

Sold in Wauwatosa/Bought in Pewaukee Using Homeowners Concept

Tax Credit Deadline is Approaching

2009-09-15T14:11:00.002-05:00

First-time home buyers have just 10 weeks left to find and close on a home to qualify for the $8,000 Federal tax credit before the November 30th deadline.

The Federal tax credit has proved to be extremely popular already, since taking advantage of it is cited by 10.8% of the buyers as the most important reason for purchasing a home, according to a recent study. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due in April 2010.

On average, first-time buyers search for 12 weeks to find a home, while closing can take between 30 to 60 days depending on the lender or issues with the property, appraisal, etc. So, it is going to be a challenge for the buyers who are just beginning the process. Smart buyers though, can make extensive use of our website to narrow down their choices, work with one of our extremely experienced real estate Professionals and use our preferred lender Netcentral Mortgage so that they can make sure the purchase closes on time.

The Rent to Own program.

2009-09-09T15:30:00.001-05:00

Recently we closed on another home that was under Rent to Own for a little over year. During that time 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 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 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 to Own 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.

What's keeping a lid on real estate prices?

2009-09-03T17:36:00.004-05:00

Part of the reason prices have dropped and continue to stay low is due to a very high number of foreclosures. What is interesting though, according to a report led by economists from Northwestern University and University of Chicago confirming that people are walking away from their homes even if they can afford the monthly payments and it's happening on a grand scale.

In a study of more than 1,000 American households, the report concludes that more than a quarter of existing mortgage defaults are "strategic" -- done by those who can afford their monthly mortgage payments, but choose to default anyway.

A main factor in strategic defaulting is the extent a home is underwater, or worth less than what's owed on the mortgage. Have a look:

Amount Underwater	Percentage of Sample Declaring Intention to Default
$50,000	9.38%
$100,000	25.81%
$200,000	41.23%
$300,000	44.65%

The report also found the propensity to walk away within a specific ZIP code fed on itself, which the researchers attributed to "a contagion effect that reduces the social stigma associated with default as defaults become more common." In other words, "Hey, if my neighbor's doing it, I might as well, too". This is happening far more in CA, NV, FL, AZ than in WI but it is happening nevertheless. As long as this phenomenon is going on and the high inventory of homes for sale, it is difficult to imagine a return to the bubble prices (years 2003-2005) any time soon.

Why, on average, paying high commissions gets you mediocre service.

2009-08-26T09:30:00.005-05:00

The majority of people complain about the high commissions yet the majority of home sellers eventually get talked into paying a high 5, 6 or 7% commission. That's just reality. What is even worse though is the fact that while you pay this hefty commission you end up working with an agent that is less experienced and has limited time in business than one would get from Homeowners Concept (3-4 times more homes sold per year than the average agent, 17 years in real estate vs 4.5)

The biggest problem stems from the way the traditional companies operate. There are way too many agents for the amount of sales. The traditional offices count on each agent to bring in some business from their circle. The brokerages will split usually 50-50 the commission with an agent that does just a few sales a year. Once an agent becomes a "big producer" and has many sales a year then the office has to give the agent a higher split, sometimes up to 90%, otherwise the agent will leave for a competing company. So, it is to the company's advantage to keep hiring and maintaining sub-par agents not only for the new business but also because it is much more profitable for the company.

Don’t believe this? Go around and interview to be a potential agent at many of the big real estate companies. Many have extremely low bars to entry and simply want an army of low-producing agents to fatten their bottom line. These mediocre agents eke out a modest living via their personal network, and the brokerage takes home fat commission splits. This is why the quality of agents remains strikingly low in our industry and is also a primary factor in why commission rates to sell your home remain so high.

I have written extensively on why the profession will ultimately change to a more efficient and effective program such as ours. Fewer agents who negotiate and close a lot of sales each year, who are extremely proficient in real estate yet charge a low commission but enough to make a decent living. This way the consumers (sellers and buyers of properties) win as they get to work with someone who truly is an expert yet pay a reasonable fee.

Proper Pricing is Key to Selling.

2009-08-18T23:08:00.003-05:00

Anybody who has ever found themselves trying to sell a home invariably struggles with the question “What price should I set on my home?” While normally this is an important decision for a homeowner to make, today it is one of the most critical decisions in order to sell a home. The Metro Milwaukee real estate market appears to be similar to most real estate markets around the country. There is a huge inventory of homes and buyer activity has dropped off from years past.

Supply And Demand Dictate Home Values
We must never forget that real estate is a commodity and as such the laws of economics apply. Many of us think of our home as a unique place on this world, and while we are living there, it really is. But once we decide to sell it, our home becomes a house, a commodity that must be sold or traded in a market filled with competition. When supply outpaces demand, values fall. When demand exceeds supply, prices rise. We typically see a balanced market when inventory is 5-6 months. Anything less than that is a sellers’ market, and of course greater is a buyers’ market.

With about 11 months of supply of homes (was 3-4 months in 2004), we are clearly in a buyers’ market. The inventory has been very slowly coming down in the last few months with some sellers taking their home off the market until conditions improve and the $8,000 buyer credit contributing to the small decline.

Avoid The Biggest Mistake That Home Sellers Make
The biggest mistake I see from people who want to sell a home comes in both good and bad markets. They price their home too high (because they do not want to “leave anything on the table”). While this appears to make sense, it actually works against them as studies have found that the “freshest” homes on the market sell for a higher amount.

In an upwards moving market, a home that is priced too high will eventually sell when the market “catches up” with the higher value the seller demands. On the other hand in a declining market of the past couple of years, a higher price makes the home completely unsaleable as prices for comparable homes keep dropping.

Chasing The Market Is The Biggest Mistake A Seller Can Make
We refer to the actions of a seller who prices the home too high in a declining market as “chasing the market.” In this type of market as prices erode this seller has to keep reducing but never enough to undercut the competition (similarly priced homes which are SELLING) are bigger or nicer. What is truly tragic for this seller is that the home, in order to sell, has to get to a price much lower than it would have sold for, at the start of the marketing period.

How To Price A Home To Sell
This is a tough real estate market and roughly only half the homes that are offered for sale are going to sell over the next 12 months (based on data from the last 12 months)! If you do not need to sell your home, help everybody out (including yourself) and take your home off the market. But if you do need to sell, work with a real estate company such as Homeowners Concept that has real estate Professionals with vast knowledge in proper pricing, staging, negotiations, closing and offers extensive marketing. This is critical. Pricing your home correctly at the start, plus marketing it in key distribution channels will allow you to be part of the 1 in 2 happy home sellers that actually sell their home. Of course saving thousands off a 6% commission is nice too.

Tips to make sure your home does NOT sell.

2009-08-12T10:23:00.002-05:00

Warning: there is some extreme sarcasm in this post and might offend some but it is based on 25 years of real estate experience and tens of thousands of sales. Proceed at your own risk.

Many articles and web sites exist that give sellers tips on selling their home. With thousands of properties in SE-WI on the market for over a year now I thought it was appropriate to put forth a list of 5 major tips to make sure your home fails to sell.

GO AT IT ALONE. This one is a no-brainer and I wrote about being FSBO in the previous post. Despite the great odds some people still try this route wasting money and time. Interestingly though the vast majority of these FSBOs will gladly pay a broker a commission (a cobroke) if they bring the buyer which is more than our 1.5% commission. Amazing!

USE A FLAT FEE BROKER. This is another avenue of selling with very low odds of whereby sellers pay up to $550 UPFRONT. The post of 3/25/09 really explains why the reputation of “list them and forget them” exists in the industry. Most of these outfits are doing just MLS data entry, and they could care less whether the home sells. 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 Homeowners Concept to eventually sell.

CASUALLY CHOOSE YOUR AGENT/REAL ESTATE COMPANY. The third biggest mistake out there is thinking that all real estate companies (and all real estate agents) are alike. Huge mistake. The fact is, real estate is an industry that is easy to enter and many people do so every year. In fact, the National Association of REALTORS® once published a report showing that 9 out of 10 people who get into real estate are out of the business within two years. Of all the major real estate companies in Metro Milwaukee we are the only one with the least amount of turnover. By far!

Selling a home is typically a very important, and costly event for most people. It involves their most expensive asset, so it always blows my mind when sellers pick their friend who “also does real estate.” Think about it, in every profession you have the “best in the business,” and then you have everybody else. Why trust this most precious asset to somebody who cannot deliver the very best for you? How can anybody who does real estate part-time and for a just a few years compete with those of us who do it full time and are veterans in the business? Also lets not forget that those same friends and relatives who happen to be agents still sock you with a 6% commission.

PRICE YOUR HOME TOO HIGH. Up until the 2005 peak in sales, a common method for marketing a home was to put a high price on it and then “let people bring you offers.” This made great sense, as you know everybody wants a deal, so you might as well build in some wiggle room. Another reason that this method was not so bad is that real estate always appreciated! No matter what price you put on the home, eventually the market would catch up to it and you would be able to sell your home. But not now. Prices are dropping. If you are overpriced today, the market is not catching up, it is leaving you behind.

IGNORE BUYER FEEDBACK. f you listen really closely, the market will tell you everything you need to know. First of all, when a great agent lists your home (which all of he or she will tell you on how best to position and price the home to attract an offer. Also a great agent will also get good feedback from the buyers that view your home. How does the home show? How does it compare to other similarly priced homes? So the key to not selling your home is to either not ask the questions, or at least ignore the answers.

Selling a home is not rocket science, paying attention to the above tips and using a company such as Homeowners Concept where an expert Realtor costs much less can aid tremendously.

Why selling For Sale By Owner is a losing game.

2009-08-05T10:15:00.001-05:00

The odds to sell FSBO without any assistance from a broker are incredibly low especially in today's market. In the past year only 9% of sellers who tried FSBO sold that way. 91% failed. That is extremely long odds, yet some sellers try FBSO only to get disheartened and chuck it all and list with a high commission broker.

The very reason Homeowners Concept even exists today is because our founder walked away from buying a For Sale By Owner (FSBO) property in 1984 and in the process realized that many other buyers probably do the same and bypass the FSBO route. An extensive research of 100 FSBOs from 6 months earlier validated the theory and Homeowners Concept was born as the missing link between FSBO and paying a hefty 6% commission.

In essence, many sellers think that if they just stick a sign in the lawn and have an attorney to handle the paperwork, they are set. This assumption is far from reality as buyers do not use the sellers' attorney. Buyers have to retain their own lawyer at a substantial upfront expense without even knowing that they will get the house. Buyers still have to navigate everything on their own including issues with inspection, financing, appraisal, etc. No wonder then that buyers shy away from FSBOs unless the property is one heck of a deal. With odds of FSBO success this low one can see why Homeowners Concept has grown and flourished over the past 25 years assisting the wise sellers who are looking to save the high commission AND have an expert Realtor handle the sale.

British are upset paying even 3% commissions!!

2009-07-29T17:21:00.003-05:00

http://news.bbc.co.uk/2/hi/business/6172846.stm. Yet most people is this country still pay 5 or 6% without giving it a thought. Why such a discrepancy? For many Americans they still have this misperception that paying more in commission will result in the home selling faster or for more money. The billions of dollars spent by the high commission brokers have brainwashed consumers into this fantasy. If you are a regular reader of this blog you already know that there is not a shred of evidence to support these perceptions. In fact a lower commission does make the home more competitive resulting in a faster sale. Not paying thousands more nets the seller more money at closing and we have thousands of such cases here at Homeowners Concept.

Another reason is that many sellers cannot break away from the "obligation" to list with a high commission agent because he or she is a relative or "friend" who still charges 5 or 6% commission and in many cases is unskilled or part time in real estate. This compromises the saleability of the property and prolongs the sale.

Lastly, the consumer in this country has long felt rich and confident in the economic future that paying more for many things was part showing off and part keeping up with the "Joneses". Nevertheless, with the economic downturn of late many people are reassessing this desire to overspend for products and services. In other words, the American consumer is becoming more savvy. Maybe in the not too distant future ALL sellers will be paying reasonable commissions that wise Homeowners Concept sellers currently pay.

Paying 6% AND giving it away?

2009-07-21T15:44:00.002-05:00

There is that persona that agents are like used car salesmen. Before I go further I want to say that I'm sure that there are a great deal of honest and ethical used-car salesmen but I use that industry because...well...you know exactly why. I must also state that for the most part, agents are ethical and look out for their clients, the seller. The bar is definitely being raised thanks in part to a much more savvy and demanding consumer. That said, it only takes one bad apple to spoil the bunch and oh boy are there some apples out there that are just rotten to the core. The following example is precisely why some members of the public continue to distrust our profession.

A relative told one of her neighbors about saving the high commission using Homeowners. Her neighbor though was "obligated" to list it with the Realtor that sold it to her and had now become her "friend" (how can one be obligated to pay someone excessive commission?). The property at 7738 W. Mt Vernon (MLS # 1086757) is in a very desirable area of Milwaukee and has a Fair Market Value of $154,000. It has a large yard, updated KIT w/SS appliances included, rec rm and it is in immaculate condition. One could see this property going for more than FMV closer to $160k. YET it was listed by the friend agent for $139,900 and of course sold in the first couple of days. By comparison 206 N. 79th (MLS 1088899) which is very close to the subject property sold above assessment. The seller probably left $10-15,000 on the table PLUS paid a hefty commission. This could have been deliberate (just to get the listing sold and out the door) or could be a case of ineptness. The agent she listed with does just a few deals a year.

We occasionally do get sellers who unknowingly want to underprice their property but we take the Realtor ethics at heart and refuse to participate in this. Our agents' expertise which is much higher than the average high commission agent (see About Us) prevents us from making errors such as this. I cannot fathom any of our agents underpricing any of their clients much less their "friends".

June area homes sales up, but prices down

2009-07-14T17:00:00.000-05:00

A small uptick in June sales is countered by continued decline in prices. Metro Milwaukee area were up 3.6 percent in June to 1,582 versus 1,527 in June, 2008. Prices of homes though continue to decline - down 11.8 percent this year. The biggest price drop is in Milwaukee County where home prices are down 26.9 percent this year.

Milwaukee County has been a bright spot in the region for the number of home sales. June was the third consecutive month that Milwaukee County had higher homes sales than in 2008. Milwaukee County had 915 homes sold in June, up 10.8 percent compared to 2008, but down 15 percent compared to June of 2007.

Ozaukee County had 100 homes sold in June, up 63.9 percent compared to June of 2008, but still down 28.1 percent compared to June of 2007.

Washington County had 150 homes sold in June, up 12.8 percent compared to June of 2008, but down 10.7 percent compared to June of 2007.

Waukesha County had 417 homes sold in June, down 12.2 percent compared to June of 2008 and down 27.6 compared to June of 2007.

Walworth County posted a small home sale increase in June, while Racine and Kenosha counties saw declines. Home sales in Walworth County were up 0.9 percent, in Kenosha County was down 15.3 percent and in Racine County were down 5.5 percent.

With home inventory at almost 11 months (2.5 times larger than in 2004), sellers have to be extremely competitive in their pricing in order to sell. Only very serious sellers are able to sell (See blog spot of May 7, 2009 for further explanation). Sellers who are wise, use Homeowners Concept's low commission structure to sell so they can be more competitive.

Is it lazyness or incompetence?

2009-07-07T15:52:00.000-05:00

We have run into the following situation before and brings to light that sellers get compromised despite paying a high commission of 5% or 6% (see blog post of 3/12/09 for a better understanding of why paying more commission gets you less expertise).

One of our agents is working with a buyer who decided to offer on the home at 165 N. 72nd st in Milwaukee (MLS# 1086805). As our Offer was being considered, another Offer by a different buyer came in. Evidently, the other Offer was better in price to the one our buyer submitted because seller signed off on the competing Offer.

We realize sellers do not know the proper way to maximize their selling price. This is where the listing agent, who seller is paying a high commission, either was lazy or incompetent in advising the seller to make a multiple counteroffer to both buyers. You see, our buyer was WILLING to go higher, had he be given the opportunity. By accepting the first offer, seller definitely left money on the table AND paid a high commission on top of that.

Because Homeowners Concept agents do 3-4 times more sales and have been in business for 12 years longer than the average agent, a seller can expect to net much more at closing (adding to the thousands in savings from paying just our low commission).

Low appraisals present a real disadvantage when paying 6%.

2009-06-30T15:23:00.003-05:00

The article in the Milwaukee Journal of 6/29/09 for the home at 4421 N. Glenway in Wauwatosa points out how stingy appraisals of late can affect sales in today's market (http://www.jsonline.com/business/49390682.html). In the article, the subject property's appraisal came in $6,000 less than the sales price. Ultimately seller had to reduce his price in order to close. Seller was with a high commission broker paying probably around $11,500. Had the sellers been wise and used Homeowners Concept, the savings in commissions would have more than covered the deficit from the appraiser.

The National Association of Realtors recently reported that "In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment." Part of these deals are falling apart due to the cost of selling a property when one uses a traditional, high commission broker.

Just like when buyers decide on which home to make an offer on and for how much, appraisers decide the value of the property for the lender regardless of what the seller is paying in commission. Sellers and brokers have absolutely no control what the appraised value is going to be. If you plan to sell, BE WISE and determine from the start that paying a very low commission would only help to net you more money once the value is calculated by the appraiser (which may be less than what you have in mind).

Avoid agents that want to "buy the listing"

2009-06-24T12:11:00.003-05:00

Yesterday we walked away from listing a home on Lannie Ct. in Elm Grove, very close to the property we have a pending sale at 13550 Wrayburn Rd. You see, the seller is already listed for $449,900 for almost 5 months with very little activity and no offer. He was also listed last year with a different agent for $479,900. Our expert agent Kati Fonte who sold the home on Wrayburn in two months and has been a top agent for the last 19 years with Homeowners Concept, told the seller the price and changes in the presentation it would take to sell but seller was reluctant to go there. Why? Because other agents have told him the price in the mid $450s is doable. And herein lies the problem. Sellers listening to inexperienced agents or agents who want to have a listing hoping they attract a buyer they then can sell them something else.

When we do a free market analysis we take the perspective of what it would take to get the property sold looking at it from the buyer's vantage and making sure we have the comparable sales to back up the appraisal. Unfortunately there are a lot of high commission agents that will take anything at any price just to get their name in the marketplace. Many sellers fall prey to the old trick high commission agents play which is "buying the listing". We refuse to participate in this game. THIS IS a total disservice to sellers who pin their hopes on a higher price than the market can support. For verification of this, one has to look at the thousands of properties that expire unsold each month in the Southeast Wisconsin MLS.

The 3 most important things a seller needs to do to sell fast and for top dollar.

2009-06-16T17:01:00.005-05:00

What are the three most important things a seller should do to sell fast and for top dollar?

One: Price at or below the last comparable sale within a three to six month prior period. Take a look at the comparable sales in your area, find the sale that is closest to your property in scope, and list your property at or lower than what that property sold for. If you choose Homeowners Concept and pay just 1.5% commission, you can afford to price lower than the competition. Remember buyers could care less what you pay in commissions all they care for is the bottom line.

Two: Work with an agent who has a track record for selling many homes and has been in business a long time. All of the Homeowners Concept agents are carefully picked from many candidates and sell 3-4 times as many homes than the average agent and have 17+ years in business vs less than 5 yrs for the high commission agencies.

Three: Present your house in the best condition possible so potential buyers walk through the door and feel they could live there. Take the advice of a professional (again the Homeowners Concept is a great source of advice) in terms of what needs to be changed, removed, or added. In some cases, you might need a professional staging company to get the house ready for showings. After the property is ready, be sure to make it available for open houses and showings.

Now, may be the best time to buy.

2009-06-10T13:02:00.005-05:00

With the Fed now on the sidelines from buying mortgages, the rates have crept up 1/2 to 3/4 of a percentage point from the lows. Nevertheless, the rates are still at a historical bottom. With the economy showing signs of stabilizing rates can only go but up from here.

Do you buy a home now or wait for prices to fall further.

This is a question many buyers are pondering these days. Even though there are no absolutes, we do know that with an improving economy the rates, barring another Fed intervention, are bound to go back up to the level before the recession hit (around 6.5%). As for home prices, the rate of decline has come down and prices should stabilize around this level. Clearly then, buyers that wait until next year to buy are faced with higher rates and possibly higher home prices.

What about the $8,000 tax credit for first time Homebuyers?

If you are a first time homebuyer (not owned a property for the last 3 years) you have the additional bonus of receiving up to $8,000 from Uncle Sam if you close by 12/1/09 (you do not have to pay this money back). Factor this credit in and it becomes impossible to see how one can be better off by waiting. This is the opportunity of a lifetime and we anticipate the late Summer and Fall to be strong as many of these homebuyers will scramble to get a place before December.

Our website: HomeownersMKE.com does offer the largest inventory of available properties in SE-WI so make a good use of it to find the home of your dreams.

Where is the advantage???

2009-06-05T15:32:00.002-05:00

This property, just a few blocks from my home, at 1004 N. 70th st. Wauwatosa just sold for $329,000 BUT started at $409,900 9 months ago. This home was listed with the number one real estate company in the metro area and one of the top producers of this company. The home had dramatic reductions of $10,000, $40,000 and $30,000 respectively, before it got to a point where an offer was accepted. One has to wonder where the big company/big producer paying 6% or more commission advantage came into the picture (about $20K).

The high commission brokers have spent billions of dollars brainwashing sellers into thinking that there is an advantage spending thousands of dollars more in commissions. If one takes the time to investigate the data, one will see that there is absolutely NO advantage whatsoever. In all cases the hefty commission becomes a disadvantage as it reduces the net proceeds to the sellers. In many instances the hefty commission stands as an obstacle to the sale when sellers have limited equity or they do not want to walk away with less money after paying the big commission.

Pressure to list with the wrong agent/company.

2009-05-31T14:54:00.002-05:00

One of our agents was working with a couple to purchase a condo in downtown Milwaukee. Upon getting an accepted offer on a condo, they were going to list with the same agent to sell their home in Caledonia at 6107 State Rd 31. That is when family intervened. You see, the sister in law of one of the sellers was a Realtor. They had considered working with her but she had a full time job outside of real estate and was only selling 1 or 2 properties a year. Clearly there was no benefit to the sellers AND they were going to pay much more in commission. Nevertheless, the family pressure was too much to overcome so the sellers listed with the inexperienced agent plus they had to pay more in commission (even with her discount). When an offer came in on their home, our agent had to be consulted as issues came up.

This case is not unusual and illustrates how family or friends can "force" a seller to pay more and get less. People waste thousands if not tens of thousands of dollars on added commission because they cannot break away from a family or friendship situation. Admittedly we have plenty of sellers that sold with Homeowners Concept in the past 25 years despite having family or a friend in the business. You do have to admire the person who can stand up and take control that is best for their financial and well being.

The advantage of Homeowners Concept in a recent sale.

2009-05-23T10:46:00.001-05:00

The advantage of having a low commission and a skilled Realtor are invaluable in this market. Here is a home at 13550 Wrayburn Rd in Elm Grove, WI that listed with us about 2 months ago that had been on the market for about 2.5 years with a number of different agents. Recently the home received some interest at the $359,900 price and an offer from a buyer represented by another Realtor. Primarily and due to the cost of the Realtor's commission of 2.4%, the offer was never accepted. After a few more days another buyer wrote an offer directly with the agent of this home, Kati Fonte. The agent skillfully negotiated an offer that was higher than the Realtors's offer AND sellers were paying just our low commission of 1.5%. Needless to say the offer was accepted.

It's a no brainer that commissions play a big role on whether an offer gets accepted by a seller. In the go-go years or 2003-2005 sellers had plenty of equity to waste on high commissions. Not anymore. It is crucial to choose a company that not only charges a low commission but brings a skilled Realtor to the table to make things happen.

More sellers now in tune with the market.

2009-05-19T16:03:00.007-05:00

Homeowner Confidence Shrinks - Most Americans Now Believe Their Home’s Value Has Declined.

Almost four years into the decline in real estate prices the tables have turned and the majority (60%) now believe their home lost value during the past 12 months, according to Zillow's Q1 Homeowners Confidence Survey. Up until last year the majority believed their home had not declined in value. Over 80% of homes across the country lost value in the past 12 months, according to real estate market reports.

As for selling activity, it’s clear that a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31% of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround.

“The perception of American homeowners is finally catching up to reality, which is that 80+% of all homes in the country lost value during this past year,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes’ prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well.”

Humphries continued, “Also interesting is the information we have for the first time this quarter on the levels of ’shadow inventory’ - homes that people would like to sell but that aren’t currently on the market, and thus aren’t captured in the official number of homes on the market. With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.”

Fortunately for sellers choosing to sell using Homeowners Concept's low commission structure, they can count on walking away with more money at closing than the competition.

Tax credit can now be used for downpayment

2009-05-14T18:16:00.006-05:00

This is great news and it is something I have personally been campaigning for since late 2008. You see, the biggest challenge for most home buyers is coming up with the cash needed to make a downpayment. The monthly payment is not usually the challenge, as that payment is similar to a rent payment for a comparable property. With this in mind, the Federal Housing Administration made a big decision and an announcement yesterday that will give first time home buyers some real help.

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration (FHA) is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment. In a sense, the “no money down” days are back, except this time the home buyer will have equity in the property. Details about the tax credit can be viewed on the March 10, 2009 post or go to http://www.wisconsinhomebuyer.org/taxcredit.html

Tax Credit Can Be Used For Down Payment

The fact that FHA will allow this will make home ownership possible for a large number of first time buyers who just weren’t able to raise the funds necessary to buy. Believe it or not, this will help the entire market, not just the lower end of the market. Anything that helps remove the glut of homes on the market will be good for all home owners, including the move up market and higher end homes. The key to seeing home appreciation again in SE-WI is to reduce inventory to 6 months of supply or below from the current 11 months.

How To Use The Tax Credit As A Down Payment To Buy A House

Donovan, speaking at a Real Estate Summit, said “We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment.” In order to facilitate this, FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the time of purchase. For more information call our lender Netcentral Mortgage at 414-258-7833.

Court decision targets extra closing fees.

2009-05-12T07:59:00.002-05:00

We've been reporting about these administrative fees (locally, we have seen a charge as high as $595 - see post of 3/30/09) charged by the high commission brokers OVER AND ABOVE the 5, 6 or 7% commission and many times come as a last minute surprise to sellers. Now comes a court ruling in a recent class action suit that should force these brokers to make full disclosure upfront. Sellers on the other hand need to use their head when choosing a broker. Our low commission rates have no surprises at the closing and our record is backed by 25 years in business. We realize it is very difficult for some sellers to break bad habits such as paying a high commission. Perhaps knowing the additional fees at the end might give these people the strength to break away and join the smart Homeowners Concept sellers.

By Kenneth R. Harney
May 10, 2009

Reporting from Washington -- A federal district court has handed down a ruling in a class action that could have a direct effect on the fees you pay to the real estate company at closing, whether as a buyer or seller. The decision targets one of the most common practices adopted by brokerage firms in recent years: charging consumers "admin," "processing," "ABC" and other mystery fees ranging from $150 to as much as $500 per transaction. The fees are tacked on top of regular commissions and sometimes come as last-minute surprises on settlement sheets.... For the rest of the article go to: http://www.latimes.com/classified/realestate/news/lafiharney10-2009may10,0,397967.story?ref=patrick.net

Which seller are you?

2009-05-07T17:05:00.014-05:00

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

Your Motivation To Sell A Home.

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

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 ….”
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.
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?

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. A serious seller can take the savings and deduct it from the list price making their home much more attractive to buyers.

Some make wrong choices, repeatedly.

2009-05-04T13:01:00.000-05:00

Just last week one of our agents showed a property at 4547 W. Tesch in Greenfield, WI to one of the buyers she has been working with, that has been on the market not with one but two different MLS only flat fee/limited service companies. As I have posted before, most sellers who try the flat fee route and pay a hefty upfront fee are out the money and prolong the sale of their property. This is the first time we have encountered a case where a seller has paid an upfront fee to two different MLS only/limited service companies (probably around $500 each time). This defies logic and clearly exemplifies how the process of selling a home lacks critical thinking on the part of some sellers.

This property has been on the market for over 550 days and was with two different agents in addition to the limited service brokers but at much higher price than currently on the market. They probably never received the proper advice on pricing, presentation and staging necessary to get the job done at a reasonable time frame. The choice of agents employed by the sellers of this property was without much research as they both do very few closings/year and consequently have nowhere the capabilities of our average agent.

In the current real estate market, sellers need to be judicious on using the best agents in the metro area. A little research would show that we offer not only highly skilled agents but we charge much less than a 5, 6 or 7% agency.

Selling/buying in this market

2009-04-23T17:10:00.002-05:00

One of the questions most often asked of us by sellers or buyers is when will the market turn around? While none of us pretend to have a crystal ball or a magic hat, it is easy for us to see that the Real Estate market in SE-WI will not be changing all that much in the next several months at least, due to a high inventory of homes and tight lending standards.

The market peaked in the Spring of 2005. The years prior to 2005 were marked by a run up in home values like we had never seen before. There were years during this time where property values increased by over 10% year to year. These values were not sustainable as incomes failed to keep pace.

In a survey of Realtors by Homegain in March, 2009 showed that 45% of homeowners think their homes should be listed 10 to 20 percent higher than what their Realtors recommend. Nearly 20 percent of homeowners think that their homes are worth 20 percent higher than their agents recommended listing price. Home buyers are experiencing a similar disconnect on price. According to the Realtors surveyed by HomeGain, only 18 percent of their home buying clients think homes are fairly priced.

This survey underscores that while homesellers may be aware of falling home prices around the country, many believe that the slide doesn't apply to their homes. Many sellers have decided to take their homes off the market or not list at all because they want to wait "till the market comes back". There is a belief by many sellers that the market is going to come back very soon. Unfortunately many sellers are putting off their plans to move on with their life hoping that the market will make a dramatic "V shaped" recovery which has never happened before.

A fascinating thing about the decision process is a sellers unwillingness to part with the lost equity on their current home, even though they will be turning around and purchasing another home under the same conditions. Furthermore, everyone accepts losses in other assets such as the stock market, collectibles and cars but most people find it hard to take a loss in the value of real estate. We constantly witness sellers getting hung up on getting X amount out of their home that they continue to "feed" even a vacant property by paying each month taxes, mortgage, maintenance, etc. You can now find 100s of properties that have been on the market for over 2 years, many of them vacant (not foreclosures).

Most economists predict that once we do finally hit bottom we will only see a more historical norm of 2-3% yearly appreciation on our homes. Do the math - with this kind of reality check it is very easy to see why it is going to take a long time to get to the levels were at prior to the Real Estate correction.

Some food for thought. As of this writing interest rates are outstanding under 5%. If you have wanted to sell your home for whatever reason and are not because you don't want to lose the equity you once had then you could be making a huge mistake. Interest rates are at a once in a life time level. When the economy does finally improve interest rates this low will not last.

It could be 5-7 years or longer before we get back to the levels of 2005. What are the chances that interest rates will be where they are now when that finally happens? When your home finally does get back to 2005 levels so will all the other homes in the area.

Flat Fee is out. Reasons why:

2009-04-16T18:38:00.013-05:00

Recently Homeowners Concept switched from being a flat fee company to just charging 1.5% of sales price. Our fee was around 1.5% anyhow as it was a tiered fee structure, so there is very little impact on any of our clients. The reason behind the switch though, was the fact that we needed to disassociate ourselves from the other flat fee companies which have popped up in the last few years and are now showing histories of low success rates while charging the sellers a hefty upfront fee of around $500 (see post of 2/20/09). Most of these outfits are doing just MLS data entry, and they could care less whether the home sells. 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 (ourselves included) to eventually sell.

Homeowners Concept on the other hand is a full service real estate company which offers more marketing, more experience for less commission due to innovative and efficient systems and has been around since 1984. We have also earned the Accredited Business BBB award - one of only two large companies to have this! 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). We actually work very hard for the money.

So many of these flat fee outfits have come to the market the last few years (as of this writing we can find at least 11 in SE-WI) 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.

Extremely High Success Rate.

2009-04-07T09:26:00.007-05:00

We occasionally get this question asked: How many of your listings do you sell? Answer: All properties, IF sellers allow us to sell their property. You see, sellers control the price of the home on the market. Most sellers are in tune with the current market and listen to our advice on initial pricing, presentation, feedback and any price adjustment that may be necessary. With our expertise and the massive exposure we offer (see 30 points of marketing), all bases are covered. Nevertheless, a small minority of sellers defy the market's call and refuse to make any adjustment to the price or presentation of the home.

This small number of sellers who refuse to face reality sometimes migrate to a high commission agency under the perception that by paying much more in commission a buyer will come along and pay "their price". Reality though is, that buyers DO NOT care how much commission one pays. One can see this by the previous post that sellers find this out the hard way, wasting many more months on the market, then reducing (sometimes multiple times) and paying a high commission at the end. Not a smart move by any means.

In previous years sellers could ask more than the market because as prices rose those sellers would eventually get "their price". Nowadays though the market is stagnant, if a seller wants a higher price than the market analysis by one of our expert agents suggests, or showings and feedback from buyers indicates too high of a price, the property sits. All real estate companies face the same problem with sellers in denial (see article Milwaukee Journal Home section of 3/15/09 ).

With our very low commission structure, sellers have a clear advantage over sellers with a high commission broker because they can afford to lower the price if they want to sell. For an average metro-Milwaukee home of $209,000 the savings between a 6% and our 1.5% commission amounts to $9,400. So if a buyer is looking at two identical properties one at $209,000 the other at $199,600 you know which one is going to get more showings and eventually an Offer. Of course there is rarely identical properties due to so many variables (location, condition, decorating, etc). This is the area where our expertise comes into play. Given the exposure and expertise we offer, there is no way a property cannot sell under our program. Hence the statement above.

Some Sellers Pay Much More Commission, Unnecessarily

2009-04-01T19:06:00.010-05:00

Paying a high commission of 5, 6 or 7% gives no advantage whatsoever to a seller as the table indicates.

Homeowners Concept offers massive marketing for properties (see 30 points of marketing) and only employs highly skilled agents that guarantee successful and smooth transactions. Despite all the benefits Homeowners Concept brings to the table there are rare occasions where a seller expires unsold (refused to adjust price to market conditions) and subsequently lists with a high commission broker.

This is a list of sellers and their properties that have left Homeowners Concept in last year and the price that they are currently on the market or sold for with another realty paying FAR MORE in commissions and getting less marketing for the homes (As of 4/1/09).

Evidently a few sellers have the perception that paying more will get the home sold and sold at the price they want. The fact is that buyers could care less how much commission one is paying. Actually by having to pay much less commission a seller could get the home sold by offering a better price to the buyer (see blog post of 2/26/09 for an actual case).

Administrative fee of $595 charged on top of 6%

2009-03-30T12:37:00.002-05:00

A few weeks ago we wrote about the excessive administrative fees charged by traditional high commission brokers. Here's the post: Did you know that most high commission companies charge an administrative fee of anywhere from $195 to as high as $499 at closing? THIS is above and beyond the 5%, 6% or 7% 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.
Today we closed on a property whereby we brought the buyer to the table. The listing office is the third largest company in town and they were charging the seller a $595 administrative fee. So even though homes prices are under pressure, some high commission brokers are raising their end fee to even higher level than it should be. It is unbelievable how much sellers get squeezed by the high commission brokers.

Thinking Limited Service? Think again.

2009-03-25T19:33:00.004-05:00

Dana Schultz - a past client of ours (one who sold 2 homes using Homeowners Concept and saving thousands in each case) - called the other day. Her daughter had been trying to sell her home in Illinois in an area where Homeowners Concept does not have an office, using an MLS only broker (also known as Limited Service) and having paid $500 upfront just to go in MLS. The property had been on the market for 9 months her daughter had moved to California and she was doing the showings because the service they used did not have the option to show. After a few trips over the IL border to show the home, her daughter decided to cut the price of the home drastically so it can sell ($30K to be exact).

This price cut had spurred some activity but she was wondering whether other Realtors were avoiding the home or talking buyers out of it because it was limited service. This issue has been raised many times by sellers, ever since the MLS only companies came into the market a few years ago. Yet, you will not find an agent admitting such but as our study of the local market showed (see the blog post dated 2/20/09 titled: MLS only companies - an eye opener) many sellers who pay all this money upfront have little success. The companies (known in the industry as "list them and forget them") collect their money upfront (around $500) and have no incentive to sell the home. There is definitely more work for an agent that decides to show and write on a limited service home because the seller is still For Sale By Owner and there is no other agent to assist the seller with the contracts, counters, inspection, closing, etc. As a result this work falls on the shoulders of the selling agent. So putting yourself in an agent's shoes having to choose from a vast selection of homes and looking at the dismal success rates Dana's observation is right on the money.

Rates under 5%, market starting to heat up!!!

2009-03-19T16:46:00.008-05:00

As was anticipated, with the Fed action yesterday, the rates took a dramatic drop to the 4.5% range (for exact rates click here: http://www.netcentralmortgage.com/pages/rates.html ). Rates were as low as 4 3/8 for a 15 year mortgage today. Expert say though that this may be the bottom in interest rates because there are fewer lenders in the marketplace now (see Wall Street article -3/20/09)

With the vast selection of properties on the market, the $8,000 tax credit for first time homebuyers and now the even lower rates, many smart buyers are using this opportunity to step up to the plate and buy. In the past 2 days alone we had eleven offers accepted. A number of buyers that were fence sitting are setting up appointments to view properties in the next few days.

If you are in the market to buy, call the central office at 414-258-7778 and we will direct you to one of our very experienced agents that specializes in the area you are looking

How sellers are pressured to pay 6%.

2009-03-12T17:01:00.004-05:00

Why do Sellers still list with agents charging 6% (or even 5%), especially in this market where money is tight and a seller may or may not have much of a profit from the sale? At the peak years we heard sellers not really caring about the cost of the commission. When someone had a property bought years ago for $150,000 and they could get $350,000 for it, having to pay 6 or 7% was not much of an issue (they were local companies charging as high as 8% in the mid part of this decade and YES people were falling for it!). Nowadays though, the average seller has much less of a gain in the value of the house to play with, if any at all. So why is it that the high commission brokers can still talk sellers into paying 5 or 6% or 7% commission and to top it off charge them an administrative fee of $300-500 at closing?

This is a continually perplexing question to people in the industry and economists who study the field, and one which probably has several answers. First, many sellers don’t realize that commissions are not fixed. The big real estate companies spend a lot of effort training their agents to focus on the service-side of their pitch and not on their fees. To support their rigid pricing structure, many agents will argue that if you pay less, you will get less. Its all a smokescreen, of course. It perpetuates the perception that if one pays more money for something you are going to get something better. The internet is proving that comparison shopping for an item or service, you can pay less and sometimes substantially less. The real estate industry has done an incredible job convincing people that paying more commission is necessary even though there is absolutely no data to support such claim. Would you buy or pay more for a home because the owner is paying more commission to an agent? Of course not. On any given day, hundreds of homes expire unsold in our local MLS that were on the market with any of the high commission companies. There is no shortage of unhappy sellers who were going to pay 6% and did not sell or sold at a much lower price than they were told. No reasonable person can argue that paying a high commission will give one an advantage over someone who's paying roughly our 1.5% commission. The comparison stats are overwhelmingly close and at times better (such as Days on Market, Solds to Listings, etc). Actually our much lower fee gives a seller flexibility in pricing his property better than the competition and selling quicker, if one so desires.

Loyalty is another reason, as sellers will often return to the agents who helped them buy their house initially. And although we certainly cherish the same long-term relationship with our former clients, we continue to work towards having sellers take a closer look at a comparable service such as ours that will cost thousands of dollars less. Or sellers will list with the agent that is helping them buy another home even though that agent will make twice as much and offer no breaks on the commission (double popping the client is the industry term).

Finally sellers will gravitate toward a relative or a friend who's in the real estate business and sometimes a colleague who is in real estate just part time (talk about getting even less due to inexperience)! One would think that these close relationships would earn the seller a big discount in the commission. NOT SO for the most part. We have listed properties of (smart) sellers who had close family in a traditional realty but could get very little break in the commission (most of the time the agent you list with will end up with about 1/4 to 1/3 of the 6% commission because the listing office, selling office and selling agent will get their cut - in the traditional world about 90+% of the homes are sold by another agent NOT the agent you list with). In the early 90's we actually had a mother working for a traditional broker persuade her daughter to list with us because all she could do was charge her just 4.5% and not make any money!

People are coming around, as the number of listings with high commission brokers is decreasing. Real estate commissions in the United States are higher than any other industrialized nation. That means that home sellers typically pay more for real estate services in the U.S. than the rest of the world, unnecessarily. Everyone in the industry knows that price, exposure and agent experience is what sells homes. That's exactly where Homeowners Concept has an advantage over the traditional high commission model. The proof is in the pudding having completed 25 years in business and sold 23,000+ properties.

Everything you need to know about the $8,000 tax credit

2009-03-10T21:57:00.007-05:00

We continue to run into buyers that do not have a clear idea of the tax credit (you do not have to pay back) and how best it can be applied to their situation. Here are the details from the National Association of Realtors:

What qualifies? Any home that is purchased for $80,000 or more qualifies for the full $8000 amount as long as it closes before 12/1/09. If the house costs less than $80,000, the credit will be 10% of the cost.
Who is eligible? Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.
How does a tax credit work? Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual's income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 - $8000 = $1500).
What happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000? This tax credit is what's called "refundable" credit. Thus, if the eligible purchaser's total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference between $8000 credit amount and the amount of tax liability. ($8000 - $6000 = $2000).
Is there an income restriction? Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.
Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit? Not always. The credit phases-out between $75,000 - $95,000 for singles and $150,000 - $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual's income reaches $95,000 (single return) or $170,000 (joint return).
How do I apply for the credit? There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov.
Is there any way to get any cash flow benefits before I file my tax return? Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Use the IRS Form W-4 (get from employer), increase your deductions so your withholding would decrease and your take-home pay would increase. Those who make estimated tax payments would make similar adjustments. If you lack the downpayment for a purchase now, plan ahead. Use the W-4 form to increase your take home pay so that in a few months you will have the required downpayment (3.5% of sales price for FHA loan)
I haven't even filed my 2008 tax return yet. If I buy in 2009, can I still claim it in my 2008 return? Yes you can! Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15, 2009. They actually have three filing options.If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on the 2008 return due on April 15. They can extend their 2008 income-tax filing until as late as October 15, 2009. (The IRS grants automatic extensions, but the taxpayer must file for the extension. See www.irs.gov for instructions on how to obtain an extension.) If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1040X. (Form 1040X is available at www.irs.gov). Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return. Their 2009 tax return is due on April 15, 2010.
Will I ever have to repay any of the credit back to the government? One situation does require a recapture payment back to the government. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply. Some exceptions apply: If the homeowner who used the credit dies within the first three years of ownership, there is no recapture. Special rules make adjustments for people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the case of a home that is part of an involuntary conversion (property is destroyed in a natural disaster or subject to condemnation by eminent domain by an authorized agency) within the first three years.

The Homeowners Concept Advantage: Recent Case

2009-02-26T20:10:00.003-06:00

We recently sold a home in Cudahy on Rosewood Dr that had been with Homeowners Concept for a number of months but had switched to a 6% broker after it expired with us. During the listing we had 3 offers from 3 different buyers but all where for a price that was unacceptable to the seller.

The first offer was the highest for about $205,000 but sellers felt that "they were not going to give it away". A couple of months later sellers reduced the advertised price and another offer came in for just under $200,000. Again sellers rejected it as inadequate. After a period of time a third offer came in even lower than the first two offers. Despite the writing on the wall of a declining market, the sellers refused to accept it. About this time the listing came up for expiration and to our amazement sellers wanted to try a conventional "high commission" broker.

After a few weeks with the new broker, sellers reduced their price to under $200,000 (and paying 6% on top of it now). The buyer with the 3rd offer was made aware of the reduction and was willing to redraft the offer now that the sellers had come to grips with pricing. The new offer was finally accepted and because buyer had been found during the time with Homeowners Concept, the commission to seller fell under our low fee (buyer was an exclusion to their new listing with the high commission broker and he was not entitled to any commission). Sellers were very lucky that the buyer had not found a property and as a result we were able to put the deal together and save them a big chunk of the 6% commission.

In summary, most sellers rely on our expertise (and we do have much more expertise than the average high commission agents) especially important in the real estate environment that we are in. Every so often though some sellers refuse to listen to facts and market data. And by paying much more commission makes absolutely no difference to a buyer as these sellers found out. Cases such as this have happened to us before (we have been saving sellers the huge commission for 25 years now and listed tens of thousands of homes). We even have had a few situations whereby Homeowners Concept brought the buyer to the table after the sellers had switched to a 6% broker. In those cases sellers paid 6% and Homeowners Concept was paid MORE than our low fee (we got paid the co-broke commission since we brought the buyer -2.4% on average-).

Flat Fee companies - An eye opener!

2009-02-20T08:17:00.009-06:00

We regularly list properties that were on the market as a FSBO and had paid hundreds of dollars UPFRONT to be in MLS via companies which are known in the industry as "limited service". There are a number of companies that offer to put a listing in MLS as "unserviced" or "unrepresented" meaning that they are not involved in setting appointments, feedback, negotiations, paperwork, etc. They do this for a flat upfront fee of as high as $555. At the urging of a recent client who had previously been with a limited service agency and having paid $495 upfront (a company that she heard from only once in a six month period), we conducted a study to find out how many of their sellers never sold and consequently lost their upfront money.

We compiled the listings that expired in 2008 for 8 limited service companies in SE-Wisconsin (there may be more). We identified 1,142 expired properties. We then analyzed a statistical 10% sample of these expireds to make sure that they had not relisted or sold later under a different MLS number. 8% fell in this category. Extrapolating the figures indicates that 1,062 properties never sold and consequently sellers WERE OUT over $500,000 (average of $470) in upfront fees just in 2008! Half a million+ dollars wasted, with no results. Less than 40% of properties listed sold this way.

Clearly the sellers are completely unaware that listing with limited service companies is an expensive, time consuming way to avoid costs that in the end compromises their ability to sell or sell at top price. These outfits are well known in the industry as "list them and forget them". You can see why; there is no incentive to work with the seller to properly stage and market the property. They got paid a HEFTY FEE UPFRONT. The advertising is minimal to non existent outside of MLS. In addition, full service agents know that they have to do extra work because sellers do not have a full service broker handling their end of the deal. Therefore, limited service listings get less than enthusiastic showings by most full service brokers (blame human nature). As a matter of fact one of the local limited service companies (that also offers full service) even points out the advantages of full service right on their website!! They still stick you with a $500 upfront fee though. One can see why the success rate is low and one must feel for all those sellers that pay all this money upfront and in the end are unsuccessful in selling.

All of these MLS only companies have sprouted in the last few years. As potential sellers become aware of the very low selling rate for the large upfront fee this model could become just a fad. Unlike online stock trading, selling real estate successfully involves good exposure for the property AND expertise on proper pricing, staging, feedback, negotiations during contract, inspection and closing issues. These are items you don't receive from limited service companies but you get from Homeowners Concept. It is truly impossible to fathom a method less expensive than Homeowners Concept without compromising the saleability of a home.