Reno Real Estate Logic

I watched the May 13/07 segment on 60 Minutes regarding on line real estate companies, how are you Realtors reacting?     ~ng

Yes, I saw the segment too and I thought this was a very interesting concept that is being utilitzed for matching buyers and sellers.  I definately use internet technology daily and the tech world is spinning new and wonderful methods every day to make our work more effective and efficient. I’m a much better broker because of the internet and it helps me stay ahead of the pack with research and trends.

Do I think there will be virtual offices in the future?

 Yes, but I don’t think you can replace a great negotiator/broker that has the ability to help you make the correct decisions for purchasing or selling your home. The problem that I see with just using a virtural agent, is that you get what I caution my clients about. Lack of expertise. Good investing skills are developed and refined. Just like a good stock broker is worth his/her weight in gold (if they know what they are doing) so is your real estate broker. But beware, there’s a lot of incompetent agents out there, I admit that.

So research who you hire. For me, I think a good Realtor is like a good doctor, stock broker, lawyer or CPA . You need all types of  specialists in your tool box to really build wealth, especially good doctors, they keep you on the planet. I use Realtors when I do investing outside of Reno. But I find really competent ones. That’s a great question, let’s go there next. (Questions at bottom of 60 minutes segment below)

NAR Responds to 60 Minutes’ May 13, 2007 Segment

CBS News Magazine Show Misses the Mark May 14, 2007 — In the world of political campaigns, it’s a standard ploy to set the stage with an empty chair when one candidate refuses to debate his opponents.The CBS show 60 Minutes gave the NATIONAL ASSOCIATION OF REALTORS® the empty chair treatment in a May 13 segment that examined the impact of online brokerages on the real estate industry. The show featured interviews with a representative from the now-defunct eRealty and the president and CEO of Redfin, but no one from NAR, even though NAR twice offered and prepared Association spokespersons for interviews with Leslie Stahl. It was CBS that made the decision it would rather interview our opponents and let them make unanswered — and inaccurate and unfair — accusations about REALTORS® and NAR policies.The one-sided journalism and egregious errors served no one well, especially the once-vaunted news magazine show. NAR staff spent nearly a year working with CBS, briefing producers on the issues involved. The producers attended the REALTORS® Conference in New Orleans and met with NAR’s legal counsel for half a day in Chicago. Yet, still the segment was full of major errors.NAR is in communication with 60 Minutes about its unbalanced reporting and presentation of misinformation and will be sending the CBS network a letter demanding an opportunity to correct these errors and misrepresentations.Here are some examples of the misinformation: Error: The six percent commission is “sacrosanct.” Fact: All commissions are negotiable. The average commission rate is not 6 percent, but 5.1 percent, according to Real Trends.Error: NAR is the industry’s “governing body.” Fact: NAR is a trade association. It does not govern the industry.Error: In 2003, NAR issued new rules of its own that threatened to block Internet discounters’ access to the MLS. Fact: The Virtual Office Website policy did not block access to MLSs for discounters or any other brokers who are members of the MLS.Error: The MLS is the database that lists virtually every home for sale in the country. Fact: There is no single national MLS. Rather, there are more than 900 local and regional multiple listing services. These are not simply “databases” but private exchange of offers of cooperation and compensation between real estate brokers.Error: Eight states have “minimum service laws” that require REALTORS® to provide a level of service many Internet discounters can’t afford. Fact: “REALTOR®” is a trademarked term and should never be used synonymously with “real estate agent.” The intent of minimum service laws is to ensure consumers receive a minimal level of service from licensees.Error: The brokerage industry has a powerful lobby. Eleven states flatly prohibit rebates. Fact: The intent of anti-rebate laws is to prevent kickbacks in real estate transactions, not to limit brokers’ incentives to attract customers. The brokerage industry does not lobby for anti-rebate laws.Other key points 60 Minutes misrepresented or overlooked: NAR supports all business models and favors none. Our 1.3 million members include REALTORS® who work on a full-service basis, as well as those who consider themselves to be limited service, fee-for-service, minimum service, and discounters. We think it’s great that consumers have a choice today. The real estate industry has harnessed technology for the benefit of consumers and will continue to do so. Real estate is both high-tech and high-touch, so can be enhanced by both electronic and personal interaction. There is no such thing as a “standard commission.” Commissions are negotiable and prices vary. The fact is that commission rates have decreased 16 percent from 1991 to 2004 (source: Real Trends). The real estate business is unique in that competitors must also cooperate with each other to ensure a successful transaction, and MLS systems facilitate that cooperation. The first MLS was created more than 100 years ago as way for brokers to share their listing agreements with each another in hopes of procuring buyers for their properties more quickly and efficiently than they could on their own. The MLS is a tool to help listing brokers find cooperative buyer brokers to help sell their clients’ homes. Without the collaborative incentive of the existing MLS, brokers would create their own separate systems, fragmenting rather than consolidating property information.

 Call Michelle: Toll Free 877.922.5900 x 175  or direct 775.750.5777

QUESTIONS??

How do you pick a good Realtor? There are so many out there!    ~dp

Yikes, is this the truth! I have been watching the flood of agents hit the streets for the last five years and it’s frightening to think that someone that get’s a license in say 12 weeks can manage an important and many times the largest investment your family has. I get calls from my clients all the time about being solicted by agents that know very little about real estate. In surveys around the nation, people think that the real estate industry is the most “unregulated” business in America. So, with that said here’s what I do.

I ask 5 key questions when I contact a Realtor to buy or sell property. If you read “Rich Dad, Poor Dad” he hits the nail on the head. Don’t hire anyone that is not invested in what they are trying to sell, especially their expertise. Don’t play Realtor crap shoot.

Question 1:

How many properties do you own? This gives me an understanding of the agents ability to negotiate and invest in real estate. I don’t like to work with agents that have never bought property. I want an agent and preferably a broker, that is invested in what they do and know how to do it.

Question 2:

How long have you been selling real estate? Amazingly enough, this question is so often avoided. A lot of people pick an agent that “looks good” and hire it. Or use a newly licensed agent because they are a friend of a friend. Wow, this is trouble and why we keep attorneys employed. Get the facts. Or get an attorney to do the paper work.

Question 3:

What properties have you sold in our price range and where are they? This question is always interesting because most agents just use the MLS to prove up properties that have sold or presently active. Get someone that has actually done some selling.

Question 4:

Are you working any other jobs? This is typically the case in real estate. Many agents are part time employees working in the casinos, salons, clubs, sport centers or what ever. Find a full time, full service, fully invested broker if you want to expect the best results. Someone that has dedicated their career to the real estate industry.

Qustion 5:

Do you have references? This is a really loaded question because a lot of agents don’t. They do a deal for someone it has terrible results and they collect their commission and move to the next victim . I give out my references by telephone and email as well as written recommendations. This way a client can actually communicate with them and check out what is important.

Call me if you need to talk. 

Michelle’s direct line  775.750.5777 or toll free 877.922.5900 x 175

Should I  to buy a property that is a “short sale” is this a good deal?    ~pf

I think that buying short sales is a risk primarily because you are actually investing in someone elses problem and I am a purist when it comes to real estate, I want a clean transaction. Most of the short sales are involving those properties that were financed for subprime investors. What this means is that the buyers really didn’t have the financial strength to be qualified for the prime market but the lenders thought, if they pay us enough we will sell them the money. Buyers like this were overly anxious to own their first home or they were people hoping to quickly flip the property for a profit.  Many of the loans that were used  are the notorious “ARMS” and most people did not realize that they recast themselves when the value of the loan exceeds the value of the property. Unfortunately, the market took a radical U-Turn in the last couple of years and the quick sales slowed way down forcing the owners to hold property vs sell with the interest clocking daily upwards. You can hold if you have a good tenant but if you are living in the house and you can’t afford to, this is a big problem.

So, when you see a short sale, many times these are properties that are encumbered by 110%-125% financing and with the market sliding back in some areas as high as 20%, you can see the value of the property actually being 30%-35% below the loan value. In other words, unless you can negotiate agressively with the institution to buy down the existing amount owed and quickly finance with another company, you are heading the same direction as the original owner. Another problem for the seller in a short sale is that lending institution can hold you accountable for the difference between the sales price and the loan encumbrance. This may be a problem for you for many years. Be sure to get that straight with the bank if you intend to sell.

Ultimately, a lot of short sales land in the foreclosure depot and this is a better place to purchase, at the court, after the judicial proceedings have been completed. Banks don’t want to be landlords and this is the time to negotiate a realistic price. They will write it off their books and move on, you get a better opportunity to build a solid investment and perhaps even buy with an equity position. It’s a lot of work to find the right deals but can be very profitable.