Archive for the 'Informative' Category

So Much for the Experts Commentary

The following is a story reported on the web from The Christian Science Monitor.

I find it amazing that the Real Estate Professor, John Baen, with the University of North Texas, Denton, says “They’ve tasted success and big money, and now their standard of living has been rocked and reality has set in,” speaking of Realtors.

Just a few paragraphs later the article states, nationally, an average agent’s income dropped from $49,300 to $47,900 between 2004 and 2006.

I’d be interested to know what John’s salary is. I’m guessing he must be making the gargantuan money compared to us big money Realtors pulling in a whopping $48k on average. Being self employed, that means after all expenses and taxes, social security, health insurance and the likes, us, rich realtors are probably bringing home around $30k. I better contact my financial planner and find out why I’m not in Forbes. Thank you John for at least giving us credit at the end that we are hard workers. I don’t know that I’ll be leaving real estate any time soon though. You see, John, it’s not all about the money. If that is all a person is in real estate for, you should’nt be in the business. They, are the agents that give us a bad name and personally, I hope that this slump gets them out of the business and they never return. Those of us that are in the business as a career, are in it because we enjoy helping people accomplish their goals and watch out for them, protecting their interests. The money is pay for doing it right!

Here’s the article. Please leave your comments.

As Housing Slumps, Realtors Quit

By Patrik Jonsson Wed Jan 9, 3:00 AM ET

ATLANTA – After three years showing houses in Atlanta’s hilly suburbs, Dee McMahon is finished with real estate.

Yanking up her custom-made “For Sale” signs in her North Lake neighborhood rattled her ego, she admits. But when Ms. McMahon closed her final sale, a house in Snellville, Ga., in late November, the mother of two felt a swell of relief.
“Now I can finally get my own house back together,” she says. “I’m nervous about the future, but I feel happy.”

McMahon is one of thousands of real estate agents across the US wandering with mixed emotions and uncertain prospects through the debris of a real estate gold rush.

As many train for new careers, return to old ones, or wait tables until prices rebound, the plight of the real estate agent – average age, 51 – reveals the human dimension of how loose lending, raw opportunity, and self-determination produced a housing bust that has stunned the US economy.

“They’ve tasted success and big money, and now their standard of living has been rocked and reality has set in,” says John Baen, a real estate professor at the University of North Texas in Denton. “The whole [economy] has been built on real estate. When the music stops, what is left?”

Americans are still drawn to working in real estate, according to the National Association of Realtors, which says its membership rose this year to 1.35 million. That growth in the ranks may be attributed to unaffiliated agents scrambling for clout in a tough market rather than an indication that the total number of agents is rising, the NAR acknowledges.

Evidence is growing that agents, especially in hard-hit markets like Florida, California, and Georgia, are closing up shop in large numbers, experts say.

Here in Atlanta, the number of agents letting their licenses lapse is growing at a faster pace than the number of overall licenses held. Nationally, an average agent’s income dropped from $49,300 to $47,900 between 2004 and 2006. Not helping that trend is the cold fact that, according to Standard & Poor’s house price index, home prices dropped precipitously in 2007, breaking the record 6.1 percent annual decline in 1991.

In Cape Coral, Fla., where only 30 percent of agents sold even a single home last year, real estate agents are “dropping out” daily, says local realtor Ginette Young. The Oregon Association of Realtors reports an 11.5 percent decline statewide of licensed agents in the past year.

Many of those who leave quietly shelve their signs. Others go out big: In Gilbert, Ariz., the fastest-growing city in the fastest-growing state, RE/MAX 2000 closed 13 offices throughout the Valley of the Sun, laying off at least 20 employees and scores of contract agents right before Christmas. The company couldn’t meet its expenses.

Real estate is a line of work filled with mothers returning to the workforce, older workers squeezed out of lifetime careers, and young opportunists looking to trade sweat equity for potentially big cash-outs. Indeed, the industry norm is that only 4 percent of agents choose real estate sales as a first career.

In Georgia, realty ranks had swelled to 48,000 at the peak of the market. In the end, many say, there were too many inexperienced agents hawking houses.

“There’s a lot of money being spent [on real estate classes] teaching agents how to waste a year of their life,” says Atlanta agent Sandy Koza. “Then you get a downturn and a bunch of people get bumped. To [experienced agents like] us, it cleans out the business a little bit.”

Florida’s Cape Coral, a canal-sliced beach community, saw 800 building permits a month fall to 25 to 30 in the past year. The rapid slowdown left real estate agents, investors, and brokers holding the bag on big-money deals.

“It’s a gold-rush mentality,” says Michael Davis, an economist at Southern Methodist University’s Cox School of Business in Dallas. He has been struck by how many agents, brokers, and investors, acting against conventional wisdom of portfolio management, converted large percentages of cash holdings into only a single and somewhat risky investment: property. “I don’t know whether they’re ignorant or optimistic, perhaps a little of both,” says Dr. Davis.

Many others became the foot soldiers in the housing boom, second- or third-careerists drawn to the self-determination, relatively low entrance costs, and perhaps even the allure of the trade as embodied by novelist Richard Ford’s legendary character Frank Bascombe, an angst-driven realtor who wanders the Jersey Shore for deals and revelations.

A former computer developer, Thomas Banecke of Sandy Springs, Ga., spent most of the summer baby-sitting a new condo development – usually a plum assignment. But when the Atlanta condo market tanked, foot traffic dwindled to almost zero.

Mr. Banecke is now back in the computer business and is putting his real estate career on hold. In some ways, he says, the cold housing market forced real estate agents, especially rookies, to confront their own abilities, schemes, and dreams. Upfront costs, marketing, association fees, and the crucial contacts are either more costly or harder to procure than an aspiring real estate agent usually expects, Banecke says.

“This kind of thing will wipe up a whole bunch of people who thought they could do this to make a living,” he says.

As for McMahon, the Atlanta agent, she still had a nice listing book and plenty of leads when she called it quits. In the end, unreliable buyers, surly sellers, and a lack of office camaraderie contributed to a decision that solidified when home sales and prices dipped. “I was waiting for a time to kind of swing out,” she says. She’s planning to become a high school science teacher.

One problem for out-of-work agents is that their skills may not transfer easily to other careers. California is waiting to hear on a $9 million federal retraining grant after 6,000 people lost their jobs in the housing industry since September.

But Dr. Baen of the University of North Texas is optimistic about their futures. “These people are hustlers, hard workers. They’re used to getting on the phone,” he says. “They’ll end up in insurance, in mutual funds, in retirement planning, and commodities.”

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Mike Gambino and Mary Jones are part of Prudential Patterson Realtors® and can be reached at (800) 321-8586 or contacted by e-mail at WeCanSellHomes@sbcglobal.net . You may also visit us at: http://www.WeCanSellHomes.com

While the contents in this article will apply in most states, they may vary in your particular locale. Mike Gambino is a licensed salespersons in Missouri.

Prudential Patterson Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.ehologo.jpg

How Important Is A Home Inspection?

By Mike Gambino & Mary Jones

Prudential Patterson Realtors

Should a buyer get a home inspection for a home they are buying? Should a seller order a home inspection prior to putting the property on the market? There are advantages for both.

Simply put, a home inspection is a visual examination of both the physical structure and major systems of the entire home including: walls, ceilings, floors, decks, exterior covering, the roof, foundation, insulation and ventilation, plumbing, electrical, heating and air conditioning. It is not an appraisal to validate the value of a home, nor a pass/fail exam. A third-party inspector will give a report on the physical condition and suggest repairs.

Buyers

For buyers, a home inspection clause in the written offer that makes the purchase contingent upon the findings can provide peace of mind. If a serious problem is found, it allows room to renegotiate the purchase price or “opt-out” of buying the home altogether. However, this is usually uncommon. Typically, the seller will already have told the buyer about any major problems.

More often, inspections reveal less serious defects that aren’t enough to warrant backing out of the transition. However, knowing about these minor problems can prevent major disasters down the road. In addition, if specified in the inspection clause, the cost of the repairs can be at the seller’s expense.

Another advantage to having a home inspection is it offers buyers an opportunity to become familiar with their new home and learn about maintenance to help in its upkeep. Although not required, it’s recommended that buyers be present during the inspection. This allows them to observe the inspection; ask questions about the condition of the home; and receive an objective opinion.

Sellers

For sellers, conducting a home inspection (or pre-inspection) before listing their homes puts the control back into their hands.

When the buyer inspection finds problems, it can impede negotiations and cost the seller more in repairs. By having a pre-inspection, the seller can help eliminate any surprise findings after an offer has been made. The seller can make repairs before placing the home on the market and possibly even increase the value of the home.

A pre-inspection can also serve as a great marketing tool. Sellers are required by law to disclose any known defects in the home. Having a pre-inspection report available for buyers tells them that the seller has nothing to hide. It also gives them a clearer picture of the condition of the home.

If there are major problems found during the pre-inspection, it gives the seller an opportunity to disclose the condition up-front, making it less likely for the buyer to pull out of the deal or try to renegotiate the price.

Knowing the true condition of a home can bring peace of mind to buyers and sellers; and be one less hurdle in the home buying and selling process. Ask your real estate sales professional for a list of certified independent home inspectors in your area.

Mike Gambino & Mary Jones can be reached at (800) 321-8586. Prudential Patterson Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.
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While the contents in this article will apply in most states, they may vary in your particular locale. Mike Gambino & Mary Jones are licensed salespersons in Missouri.
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Need Extra Space? Try Storage

By Mike Gambino and Mary Jones
Prudential Patterson Realtors

If lack of space for your belongings is an issue for you, off-site storage may be the right solution. You don’t have to be a pack rat to find yourself needing extra space. You could be renovating a room and need somewhere to house the contents. Perhaps you need to move into smaller quarters temporarily while you’re waiting to move into a new home. Or you may need to create a spacious look for your home while it is on the market.

Renting storage space is a pretty simple process, especially when you plan ahead. Here are helpful tips for choosing a facility and protecting your property:

Shop around to find the facility that best meets your needs such as storage size, price, accessibility and security.

When shopping for a storage facility, you will need to know what size unit is required to hold your possessions. Typically you can choose a space from as small as 5’x5’, which is the size of a small closet and holds between 10-15 boxes, to 10’ x 25’, which is about the size of a single-car garage. The facility’s representative can help decide what is the best size for you.

You also want to make sure that your items will be secure. Ask questions such as: Is there a guard on duty? Video surveillance? Alarms? Do you need to provide your own lock? Is the area well lit?

In addition, don’t assume that the facility, or your homeowner’s or renters insurance, covers your belongings in case of theft or damage. Most storage centers assume no responsibility for your items, so talk with your insurance provider.

You also want to have reasonable access to your belongings. Find out the facility’s hours of operation and the name of a contact person.

Before signing any agreement, inspect the facility and your storage unit for cleanliness and signs of proper maintenance. Is the area well protected from rain, snow or humidity?

Make certain that you understand the rental agreement and get a copy of the contract. Are you renting on a month-to-month or a six-month basis? Is there a deposit? Does termination of the agreement need to be in writing? How much advance notice do you have to give?

Before moving your possessions to the storage unit, take actions to protect them from damage or theft. While packing, label boxes on each side by numbers rather than content. Make a master inventory list so that you know what is in each box, as well as furniture and other unpacked items. Don’t use newspaper as packing paper because it may smudge off on your items.

Prepare your unit by placing plastic on the floor. If you will be moving in large furniture, lay down blankets or sheets as well. Then store your most valuable possession first, toward the back. Store frequently used items at the front. Make sure that you leave a walkway so you can access your belongings. In addition, leave a small space between the objects and the storage unit’s walls.

No matter what the reason, using an off-site storage unit is a good solution for your short-term space challenge. Just make sure that you understand the terms of your agreement and that your belongings are secure.

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Mike Gambino and Mary Jones can be reached at (314) 506-6700 or (314) 506-6710. Prudential Patterson Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.
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Making Sense Out of Real Estate Lingo

By Mike Gambino

Prudential Patterson Realtors

As with all industries, real estate professionals have developed a lingo and acronyms to help them communicate with each other more easily. For the first-time homebuyer (and even some veterans), making sense of property listings can sometimes leave you feeling like you’re deciphering the DaVinci Code.

Let’s take a look at a sample real estate listing:

2,500 sf on a c-d-s, 2BR, 2.5BA, CA, spac grt rm w/ wbfp, grmet kit, det gar

Looks a lot like alphabet soup. However, using this type of abbreviated property description saves valuable advertising space. Some abbreviations you’ll probably encounters are:

AC or A/C: air conditioning
BA: bathroom
BR: bedroom
CA: central air
C-D-S: cul de sac
DET: detached
DK: deck
EIK: eat-in kitchen
F/FIN BSMT: finished basement
FDR: formal dining room
FP, frplc: fireplace
GAR: garage
GRMT KIT: gourmet kitchen
GRT RM: great room
HDW, HWF, Hdwd: hardwood floors
HOA: home owners association
LR: living room
KIT: kitchen
OFC: office
PVT: private
SF: square feet
SPAC: spacious
VW, VU: view
WBFP: wood-burning fireplace

In addition to the abbreviations in property listings, here are a few other common terms you should become familiar with.

FSBO—For Sale By Owner. This term refers to a property which the homeowner is trying to sell independent of a real estate professional.

MLS—Multiple Listing Service. MLSs are comprised of a group of real estate brokers who have agreed to share their property listings. This listing is then provided to the group through a database or directory. If you are buying your home, this is the service that your sales professional will use to search for potential homes for you to purchase. If you are selling your property, your real estate professional can list your home through the MLS. For-Sale-By-Owner (FSBO) properties are typically not listed through the MLS.

CMA—Comparative Marketing Analysis. This analysis is an informal assessment of a property’s market value. This is one of the tools your real estate professional can use to help you determine a reasonable listing price. Usually, the CMA compares your property with similar properties that have sold in your area within a certain time frame. Besides purchase price, some of the information typically listed is the number of bedrooms and baths, approximate square footage, size of major rooms, amenities such as fireplaces and pools, age of the home, and property taxes.

During the real estate process, you’ll more than likely come across more acronyms and lingo. Make sure you ask your real estate professional to explain any terms you are unfamiliar with so that you are not in for any surprises.

By the way, the listing above was a 2,500 square-feet home on a cul-de-sac, with two bedrooms and two and a half baths, central air, a spacious great room with a wood-burning fireplace, and a gourmet kitchen and detached garage.

Mike Gambino can be reached at (314) 506-6700 or 1-800-321-8586. Prudential Patterson Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.

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Tips for Selecting a Real Estate Professional

By Mike Gambino
Prudential Prudential Patterson Realtors

Technology has changed the way consumers do business. The real estate industry is no exception. In fact, 77 percent of homebuyers use the Internet during their property search. (The 2005 NATIONAL ASSOCIATION OF REALTORS® Profile of Homebuyers and Sellers) However, most agree that when it comes to buying or selling a home, a transaction of this magnitude requires the guidance of a professional. In the same study, 90 percent of buyers and 87 percent of sellers use a real estate professional during the process.

Whether you’re buying or selling a home, you’ll want to interview two or three real estate professionals. To locate a pool of potential candidates:

* Ask family, friends, and business associates for referrals.
* Attend open houses. If the sales professional or broker impresses you, ask for a business card.
* Drive through neighborhoods that interest you and look for yard signs to see what company handles most of the sales.
* When referred to a company rather than an individual, call and ask to speak with the “sales professional on duty.”
* Search local newspapers and real estate publications.
* Call the local Prudential Real Estate Network member office for a referral to an office in another town.

Now you’re ready for the interview. Whether you’re buying or selling, the sales professional should explain the entire process up front. Sellers can use the “listing presentation” to compare sales professionals on their preparation and professionalism. Ask questions that will display the sales professional’s experience, knowledge and motivation to help you. Questions such as:

* Do you work full time or part time?
* How long have you been selling homes in this area?
* Are you familiar with the areas I’m considering?
* What type of homes do you usually handle?
* What percentage of your business comes from referrals and repeat clients?
* How many sales have you closed?
* How many homes did you sell last year?
* What percentage of your listings sold during the listing period?
* Did they sell close to the asking price?
* On average, how many days does a home stay on the market?
* Will you guide me as I prepare the house to be shown?
* Will I receive a copy of the marketing plan?
* How will you advertise our home? In what publications and when will ads run?
* Will you employ an Internet marketing program?
* Will you hold open houses? How will you advertise an open house?
* What other ways will you else to get the word out?
* How often can I expect to be updated, even if there’s nothing to report?

A word to sellers: don’t base your selection solely on selling price or commission. It’s probably best to avoid working with someone who promises you the moon–in this case, an unrealistically high price–then has to make price reductions until the property sells. Instead, focus on marketing plans, service and past results. Also, don’t be persuaded by low commissions. A seller could actually net more than with a discount broker when a winning marketing plan combined with proper pricing results in a faster sale and at a better price.

Aim to select someone who is knowledgeable and with whom you feel comfortable. It almost ensures a productive and mutually rewarding relationship.

Mike Gambino can be reached at (314) 506-6700. Prudential Patterson Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.
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