29 YEARS OF SAVING GREATER MILWAUKEE SELLERS THOU$AND$ IN COMMISSIONS

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 celebrating its 29th 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 (covering ALL real estate websites, our own website with the most photos per home and our magazine, 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.

UNLIKE SOME COMPANIES, OUR LISTINGS APPEAR ON EVERY WEBSITE!

Most sellers do not know that the largest real estate company in Southeastern WI excludes their listed properties from the top two real estate websites: Zillow and Trulia.

According to aggregate Web visit metrics compiled by Experian Marketing Services (formerly Experian Hitwise) as of 2/13, Zillow and Trulia continue to be the top destinations for real estate.

Inman News®

Rank	Website	Total visits	Visits share
1	Zillow	44.19 million	9.17%
2	Trulia	33.70 million	7.00%
3	Realtor.com	29.32 million	6.09%
4	Yahoo Homes	26.48 million	5.50%
5	FrontDoor Real Estate	26.14 million	5.43%
6	Homes.com	17.98 million	3.73%
7	MSN Real Estate	7.17 million	1.49%
8	Rent.com	7.12 million	1.48%
9	AOL Real Estate	6.56 million	1.36%
10	Apartment Guide	5.89 million	1.22%

The reason this local company and a few others nationwide have decided to not display their listings on the top websites is that they lose buyers to other agents who advertise alongside each property. By doing so though, they compromise their sellers' ability to get maximum exposure for their home and ultimately sell in a timely fashion and for the highest price. BOTTOM LINE, greed trumps ethics.

Home sellers think they're better off signing up with the largest local firm (as their TV commercials promote) but what they don't realize is that company size is irrelevant to the buyers. Latest data shows that almost 95% of the buyers find their eventual home on their own, primarily using any of the real estate sites above. So not having your home show up in the top 2 websites is definitely a disadvantage.

This is another example that Homeowners Concept's Full Service program at 3.9% provides more marketing than having to pay 6%.

STOP PAYING INFLATED COMMISSIONS!

We've proven beyond a shadow of doubt that using Homeowners Concept is an extremely successful way to sell a home and at the same time save on commissions (even our top tier of 3.9% saves a seller thousands of dollars on an average home). Just think about the stats for a minute: Homeowners Concept is celebrating its 29th year in business, we have sold upwards of 23,000 properties, saving sellers' close to $95MM in commissions. All that business was handled by top notch Realtors who've been in business much longer and do many more sales per year than the average agent. AND to top it off Homeowners Concept has maintained an A+ rating with the Better Business Bureau, unlike other large real estate companies charging 5 or 6%, which have not!

Unfortunately many sellers continue to waste money paying 5 or 6% commission all the while working with mediocre agents. 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 our 1.5% or 3.9% commission, considering the marketing and expertise we offer is at higher levels than the competition. Also our lower fee structure gives a seller flexibility in pricing his property better than the competition and selling quicker, if one so desires.

At the peak real estate years many sellers did not really care 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 as much of an issue (they were local companies charging as high as 8% in the mid part of this decade and YES people were paying that!). 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 employing a company like Homeowners Concept makes so much more sense in today's market.

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

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, many times 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 and smooth closings. It helps that Netcentral is located in the same building as our central office in Wauwatosa. If they EVER do not do what they promise, they will certainly hear it from all the Homeowners Concept agents and we do a lot of sales each year. 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, sellers and agents 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

WHAT YOU NEED TO KNOW ABOUT SHORT SALES.

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 seasoned 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. All of the agents at Homeowners Concept have been trained and are quite capable of short sales due to our high volume. There's definitely more work involved in a short sale but it is good for all: sellers, buyers and lenders.

SELLING REQUIRES THE PROPER STRATEGY.

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

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

How to Develop an Accurate Pricing Strategy:

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

BEWARE OF BUYERS WHO ARE NOT PROPERLY APPROVED.

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.

TOO MANY AGENTS FOR THE AMOUNT OF SALES

At the end of 2011 the number of agents nationwide stood about 28% higher than the number of agents before the real estate bubble began (2001). Although the number of agents is declining, there is still a tremendous amount of agents in the market for the amount of sales.

This is a subject that we have touched upon before that even though the number of sales have reverted back to pre bubble years the number of agents have not. The large number of agents continues to be an issue for sellers and buyers as, unknown to them, have to work with many 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 to maintain real estate expertise.

The reason for so many agents is that the traditional, hefty commission companies continue to hire unsuspecting agents. You see, besides some initial training, there is no ongoing expense to 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 very few real estate companies in the country and to our 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.

ONE OF MANY PRAISEWORTHY TESTIMONIALS!

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 services 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 occasionally 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 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. Hard to imagine there is a better agent and company to work with, never mind the lower commission!!
Janet P.