Better money sooner for Sun City sellers

Category: Buying Your Home (page 3 of 3)

The challenge for Realtors and lenders in the future: How do you sell to consumers who don’t want to be sold?

This is my column for this week from the Arizona Republic (permanent link). The lender in the story? Brian Brady, America’s #1 Mortgage Broker.

 
The challenge for Realtors and lenders in the future: How do you sell to consumers who don’t want to be sold?

We represented a cute couple in the purchase of their first home late last year. That much is not news: First time home-buyers are the bread and butter of the real estate business. What was interesting to me was how internet-focused they were.

The husband, Michael, is an internet adept, but his wife, Danielle, is a true wizard. Her primary interface to the commercial world is the world wide web.

They found me on the internet, of course, and I referred them to a lender that I know through the nets.

Consider this: There are 30,000 Realtors in Phoenix, and at least that many lenders. All of them are advertising at a furious pace — newspapers, real estate magazines, supermarket shopping carts, bus benches, billboards, radio, TV — plus balloons, free pens and scratch pads and coffee mugs, refrigerator magnets, flower seeds, recipe cards and Halloween pumpkins.

Real estate professionals spent millions of dollars trying to get Michael and Danielle’s attention, and all of that money was wasted. They are not paying attention to advertising.

To the contrary, if Danielle cannot completely research a product or service on-line, she won’t have anything to do with it. They never once went into the home they were buying without a digital camera. I watched Danielle crane around in impossible contortions so she could read and write down the model and serial numbers from the washer and dryer so she could research them on-line.

Looking forward, nothing changes as fast as we expect it to. But looking backward, the world seems always to be changing like dreams. Danielle is immune to advertising. She recycles her junk mail unread. She doesn’t want to be pitched, she doesn’t want to be sold, she doesn’t want to be wheedled or needled or cajoled. She doesn’t want to be closed on.

All those old school gimmicks still work — on some people — and they will continue to work — for a while. But Danielle is the future of real estate marketing. Realtors and lenders are going to have to learn to sell to consumers like her.

Technorati Tags: , , , , ,

Looking for a bargain in Phoenix real estate? Add some elbow grease to your money and go for a bank-owned home

This is from my Arizona Republic column (permanent link):

In the past we’ve talked about how home sellers can command a premium price in the current Phoenix real estate market, even if they are competing with nearby foreclosure properties, by putting the home into turn-key condition.

So what’s the counter-strategy? If you’re a buyer looking for the best possible price, what should you do?

Go for the bank-owned homes, of course. Trying to buy a short sale can be heart-rending. The price listed in the MLS will be meaningless. The lender will decide what price to allow. Still worse, lenders drag their feet on short sales. If they have any hope of keeping the loan alive, they won’t let the house go. Meanwhile, your own interest rate could be spiking, rendering you unqualified for the deal if and when it finally comes through.

By contrast, bank-owned homes (you might hear them called REOs, for “real estate owned”) can race through the escrow process. Once a bank has foreclosed on a home, all it wants is to get it off its books and recover whatever cash it can, as quickly as it can. In consequence, your offer might be approved in just a couple of days, with the bank rushing the closing date any way it can.

Because of that, your loan qualification matters a lot. If you look shaky to the bank, it might pick a lower offer from a stronger borrower just to be assured of getting whatever money it can out of the deal.

And then there is the condition of the home. People  losing their homes sometimes let the daily maintenance slide. Expect to see filthy carpets, scuffed-up paint, damaged doors. The air conditioner might have been removed and sold, or the water heater — or even the kitchen sink.

In most cases, the bargain price you get for the home is going to be offset somewhat by the money you will have to put into it. But if you are handy and industrious, the profit on these expenses can be two dollars or more in value for every dollar you spend.

A thoughtful reminder to the home-schooling parents of California: Arizona is the most home-schooling-friendly state in the west, our homes are affordable, our weather is delightful and our state government pretty much minds its own business

Unbelievably, home-schooling has been outlawed in California. We would love it if California home-schoolers were to call us for help in relocating to Arizona. But however you get here — get here. You have a right to school your own — and Arizona knows it.

Technorati Tags: , , , , ,

Choosing second-best could get you the best possible home

This is my column for this week from the Arizona Republic (permanent link):

 
Choosing second-best could get you the best possible home

Last week we talked about how, even with so many unsold properties, multiple buyers can somehow land simultaneously on the one property on the market that approaches perfection.

This is perfectly natural human behavior, if you think about it. Who hasn’t thumped a melon? Who hasn’t reached into the back of the cooler for the fresher milk? Who buys the brown ground beef when there’s redder meat available. We were not just born to shop, we will perish if we don’t learn to shop wisely and well.

It’s no different for houses. You have a certain amount of money available, and a certain selection available to you for that money. It’s completely natural that you would shop until you find the home that is far and away better than your other choices.

And it’s perfectly natural that other buyers would come to the same evaluation of the available inventory. They wold have bought the same melon as you, except you got there first.

But there’s still an important difference. A good melon is as good as it’s going to get, and a bad melon cannot get better. But a house can almost always be improved.

Here’s a melon-improvement strategy for financially-savvy home shoppers.

That home you fell in love with is almost certainly a production home — a tract home. Yes, it’s in great shape, and it’s staged to perfection. But guess what? There are three more almost exactly like it for sale on the same street. They’re not as clean, not as nicely-decorated, not as well-marketed — but that works to your advantage.

The difference between your dream home and what looks to you like a bad melon is really just a matter of money. If you put that money into the bad melon, it will be as good or better than your dream home.

So, rather than competing for the best house and paying top dollar, you can use it as leverage to get a lower price and seller concessions on a home that could be even more ideal for you — after you do a little work.

Technorati Tags: , , , , ,

If you’ve finally found your dream home — don’t dawdle

This is my column for this week from the Arizona Republic (permanent link):

 
If you’ve finally found your dream home — don’t dawdle

Here’s a paradox for the ages: It’s been a strong buyers market for more than two years — and yet buyers still can’t afford to be lax about the houses they love.

How’s that? In our recent seller’s market, sellers were completely indifferent to home-buyers — as a matter of studied strategy. “We might consider your offer,” they seemed to say, “but not today. We’re letting the offers pile up until Monday or Tuesday, then we’ll take a look at them all at the same time.”

Why can’t buyers in this market approach sellers with the same bland indifference?

They can — provided they’re willing to buy just any home.

In a seller’s market, qualified buyers are essentially a fungible quantity. Each one is simply a pile of money in the seller’s eyes — some larger, some smaller, some sooner, some later. Allowing for risks and opportunities, one is as good as another.

Not so for buyers. Houses are inherently non-fungible — each one is unique in location, appearance, construction, condition, amenities and lifestyle factors. Even with so many homes for sale right now, it can be a challenge for buyers to find even one house they are completely committed to buying.

My take: If you want to get the best possible deal, pick three homes, not one, and pit the sellers against each other.

But buyers don’t do this. Instead, they look at dozens of sub-standard offerings, and then focus all of their attention on the one house they can find that is priced right, repaired and staged right, marketed right.

And guess what? Of all the houses these buyers will have seen, this is the one for which there is competition. The factors that appeal to them also appeal to the other folks out there looking for homes right now. The dirty or neglected or over-priced houses attract no offers, where the few that are truly market-ready can draw multiple contracts within a few days of being listed.

The lesson to take away: If you really love the home, don’t dawdle. Chances are, someone else loves it, too.

Technorati Tags: , , , , ,