Oxymoron - Don't Believe Everything You Hear

"All that glitters is not gold"

Oh really?!  But gold actually does glitter, so there is an erroneous premise here.  

To be a true and correct idiom or expression it should be coined as, "NOT all the glitters is gold" (gold glitters, but it is not all that does; such as glass, diamonds, metals, etc)  

The moral of this post?  Don't believe or just take for granted everything that you hear...

Bank of America (BoA) - "Brazen, Unauthorized & Impermissible"

Bank of America is NOT one of my respected or trusted financial institution by any means.  I feel sorry for their stockholders who got completely HOSED.

Article as reported in Fortune Magazine:

A Fistful of Someone Else's Dollars

Troubled homeowners aren't the only ones having their issues with Bank of America.

A federal bankruptcy judge ruled Tuesday that BofA (BAC) must return $500 million in collateral it seized without cause from Lehman Brothers two years ago, just after the investment bank collapsed in the biggest-ever U.S. bankruptcy.

Bank of America's actions were "brazen…unauthorized and impermissible," U.S. bankruptcy judge James Peck wrote in a ruling Tuesday, the Wall Street Journal reports.

BofA forced Lehman to post the collateral in August 2008 as questions started to mount about the investment bank's health. There's nothing unusual there, as rivals such as Citi (C) and JPMorgan Chase (JPM) did the same.  The problem lies with what BofA did in November 2008, when it took the cash from the collateral account to offset debts it was owed by Lehman. The bank did so without the court's permission, the Journal reports.

Peck ruled this week that BofA's moves violated rules protecting companies from having their assets seized, and made clear he wasn't overjoyed with the bank.

In his order, Judge Peck said it was "astonishing that [Bank of America] would make the premeditated tactical decision to deliberately seize the collateral" without first seeking court permission. The judge said Bank of America acted with "apparent disregard for the consequences" and ordered the bank to repay Lehman's bankruptcy estate the $500 million plus interest.

Tuesday's ruling came on the same day a top executive at BofA's home loans divisions said the bank regrets its missteps in the foreclosure fiasco. But the bank has no regrets in this case, a spokeswoman indicates.

We are disappointed with the court's decision, and we continue to believe that our actions were fully supported by well-established New York law and the unambiguous language of the Bankruptcy Code.  We are considering our appellate options.

Home Valuation Code of Conduct (HVCC) Appraisals - New Rules

Just when I thought I had beat Freddie Mac and Fannie Mae's Home Valuation Code of Conduct (HVCC) appraisal guidelines into the ground, here we go again.....  (see all my previous blog entries on this topic)

  

The Federal Reserve proposed far reaching new rules October 18, 2010 that could affect residential real estate appraisals.  The interim rules which are to take effect December 2010, and be finalized in the Spring of 2011, prohibit outside influence in appraisers' valuations and require lenders to report evidence of appraiser misconduct to regulatory authorities.  Isn't that what HVCC was designed to do in the first place?!  So why are they "re-inventing the wheel" here on this issue?

The new rules will supersede or replace HVCC.  All of this is as a result of Congress passing the "Dodd-Frank Wall Street Reform and Consumer Protection Act" in July 2010 and being signed into law by President Obama. The original sponsors of the bill were Barney Frank (D-MA) and Chris Dodd (D-CT) in the Senate Banking Committee as a result of lobbyists pressure to change or reform the appraisal rules or guidelines under HVCC which resulted in a whole host of problems and complaints with inaccurate appraisals produced by appraisers who were were working for low fees through appraisal management companies (AMC's), short turn around time, and unfamiliarity with the local market.

Appraisers were one of the principle parties that got us into this whole real estate market meltdown in the first place, then after rules and regulations were imposed on them to prevent collusion in appraisals, they have to go and screw things up even further for the consumer!  

As a result of this whole real estate market meltdown or bubble-burst, it is quite interesting and makes a very poignant statement to note that there were no "punitive" rules imposed on Realtors.  As buyer agents we assisted people who were able to obtain financing, which was contingent upon a satisfactory appraisal.  We had no part or undue influence in either the buyer obtaining financing or in the appraisal.  As long as they had a lender's approval letter, we assisted them in buying a home and assumed that lenders (and appraisers) were practicing prudent and rational guidelines in their lending practices.  As listing agents we had to work within the constraints of "fair market value", unrealistic seller expectations and perceptions of value; and work within the constraints or confines of the real estate appraisal - in other words, if the property didn't appraise for what a buyer was willing to offer for it, they weren't going to get the financing, and the deal was not going to go through.

Realtors cannot be blamed in this whole debacle; the finger points DIRECTLY back to lenders and appraisers who were in "cahoots" or collusion with each other in driving the price of housing literally through the roof.  Wall Street of course is also to blame since they provided the funding and means for this all to take place in the first place and knew damn well that this was going to happen.

"House of Cards" from CNBC is a great video piece of investigative journalism which documents how this all happened.

Push/Pull Door Design

This is a great concept...  but where does the lock set go ?

 


Obviously this application is for interior building structures, and not the main outdoor ingress/egress, but it's a cool design....  But I guarantee that folks would still try to pull the button out, and push the handle in !

 

Say What You Mean, and Mean What You Say (Part II)

This is a follow up to my previous blog entry, part 1.

Here's another one!  Do I have grey or gray hair ??

 

Why the contemplation or trepidation over which one to use or which one is "PC" (politically correct).  Or should I just say that my hair is an "achromatic color somewhere between black and white?!"  Maybe I should just color my hair to avoid the confusion!  LOL

National Association of Realtors - Washington, DC

The National Association of Realtors (NAR) building (on right side) in Washington, DC. The U.S. Capitol Building (Congress - House of Representatives and Senate) is visible in the background.  If they want to go lobby Congress, the only thing they have to do is just walk up the street a few blocks !  Talk about, "Location, Location, Location"  LOL  : )~

Say What You Mean, and Mean What You Say

Two of the most ambiguous words in the English language prohibit us from doing just that; the words subsequent and next. 

"Take the next exit"  -  this one ?  "No, the next"

  

"Let's meet next Thursday" - next week ?  "No, this week" (then it should be let's meet this Thursday; or not this Thursday, but the next [week].

  

"That's next to impossible!" -  does that mean it is almost impossible, or one degree below (or possibly even higher than) impossible?!

 

The word "next" can cause a great deal of confusion and can be quite vague actually! 

As a Paralegal, I have also encountered the word "subsequent" in statutes, regs, administrative law or other legal codes.  "Subsequent" can mean either before... or after; e.g. "subsequent to judgment" (also note that judgment has no e) when referring to civil procedure.  Does that mean before judgment is entered or after judgment is rendered?!   "Subsequent to receiving your travel Visa documents, you must also ..."  Does this mean before my travel Visa document is issued or after it is issued, I must do X? 

Why the ambiguity ?  Why can't we simply say before or after for the word "subsequent"; and clearly define "next" ?!

Rent vs Own (another point of view)

(See video clip below after my commentary or analysis)

This guy makes some very interesting points about the down sides of home ownership; but I think he's still whacked ...  Even though as he points out that your down payment which will be "parked" into your home forever, or used when you trade up to another home, and will not be accessible to re-invest in other ways; and that real estate taxes which you'll pay over the life of your mortgage loan (15 or 30 years) and which are "hidden" in your PITI as part of your total mortgage payment can certainly add up to a large aggregate over the life of that mortgage or ownership interest in the property, along with other maintenance costs -- in the end or final analysis you ARE building equity over time and real estate property ownership is something that can be passed on to an heir; whereas what can you pass-on with rent or a lease?  Nothing !  If you added up ALL the expenses of home ownership (mortgage interest, real estate taxes, repairs, etc) in the end you should still be far better off than with renting and at a minimum break even or have a large gain in equity/appreciation if you ever want or need to sell some time down the road.  The exception to this assumption or case in point about "short sales" is where someone bought at the top of the roller coaster apex of the market, put little to nothing down, had an ARM loan, re-financed or pulled equity out on a HELOC or home improvement project, then the market crashed or receded a bit like the tide; then they could find themselves, as many home owners did in this recession, being upside-down in their loan.  However, like the stock market, if you're in it for the long term and can weather through little dips or fluctuations in the market; in the end you'll come out a hell of alot better (not bitter LOL) than if you were just renting and flushing your money down the toilet each month.

One can also get a life insurance policy to pay off the mortgage in the event of an untimely passing; then any children or heirs, or surviving spouse, can own the home free and clear.   Assuming the average person does not have bundles of cash saved up to invest in other ways or "diversify their financial portfolio", renting affords absolutely no return on investment whatsoever whereas real property ownership does by way of building equity in the property and appreciation. They're not "making any more land" by the way and with MASS immigration and natural population growth an abundance or surplus of real estate parcels for the taking at give away prices or for the "stealing" or homesteading is not going to happen.

Real estate ownership is a long terms investment strategy; whereas what this guy proposes by not owning and renting and using your extra bundles of cash (assuming you have such a nest egg) would be a short term investment strategy. 

Another thing this nut job points out is that with career changes, TDY's or relocations; renting does afford you the opportunity to pack up and leave relatively quickly. Most leases, however, call for a minimum two (2) month advance notice if the tenant wishes to terminate the lease early; but depending on what your lease contract says it does not necessarily mean that you can just up and leave at a moments notice as this guy implies.  What about KEEPING your property as an investment and renting it out while your gone ??  Have someone paying your mortgage payments for you and continue building equity in the property, while you rent elsewhere as needed.  Of course being an out of state or area landlord does have it's risks and you may need to appoint a property manager or trusted friend or associate to handle any issues that might come up in your absence, such as that call from your tenant saying there is a repair issue or something.  But with due diligence, selecting the right tenant, and having some funds set aside in an escrow account or savings account in reserves for repairs, to cover for tenant if they are late or cannot pay rent for a month or two, and other property management issues that could arise - it would be far more financially beneficial to rent your place out and keep it as an investment.  Also if you sold just because of a job change or relocation and then went from owner to renter, you could get hit with Capital Gains taxes if you remain a renter.  Funny that this guy didn't even cover these points or that the interviewer didn't ask him or make any counter arguments on rebuttal.     

He makes some very interesting and perhaps valid points about rent vs buy; but I think he's still whacked and off base.  Less stress in renting vs property ownership (as he says) perhaps; but a whole lot less return on your investment with renting too in the long run.

Ok, now watch the video and make up your own mind after hearing what he says and what I have said above....


(if video does not play correctly switch video mode to HD in embedded player)

What an Appraiser Sees

Here is a fairly good, but very basic, understanding of how an appraiser sees things.  This is overly simplified and of course there is much more that goes into a good appraisal that what is shown here; but they do make a very excellent point on making sure the appraiser is knowledgeable and familiar with your particular neighborhood.  I am surprised they did not even mention "HVCC" (Home Valuation Code of Conduct) appraisals.  I have beat this topic like a dead horse here on my blog site, so if you're interested to know all about HVCC just search through my blog archive to see the many articles and videos I have posted about it.

The appraiser here sort of touches on it, but could have brought the point home more clearly by specifically mentioning "cost vs value" in upgrades, updates that a homeowner does.  For example just because you spent $40K on the garage project doesn't necessarily mean that equates to an automatic $40K increase in your home's value.  Same as with the granite counter tops and other kitchen & baths improvements.  The appraiser in this video makes an excellent point about being relative to other properties in your neighborhood.  For example if you have granite counter tops, and everyone else does too in your neighborhood; then that update to granite counter tops you did probably isn't going to get you additional value on that appraisal....

(if video does not play correctly, switch video mode to HD in embedded player) 

How Much Down Payment is Required to Purchase a Home ?

Here's a fairly straightforward answer and video which I have copy/pasted from this source article.  I do not endorse Bank of America by the way who sponsors this "infomercial" on AOL:  (see text of article below embedded video)




The amount of down payment necessary when buying a home depends on the type of loan applying for, such as a government loan like an FHA or VA loan, or a conforming loan from a private institution. In the case of non-conforming loans, which are typically "jumbo loans", the down payment requirement can be 20 percent.

FHA loans are a great way to get your foot in the door with a low down payment as the minimum down payment requirement is only 3.5 percent of the mortgage amount you're seeking. It amounts to a 96.50 percent loan-to-value amount -- but there's a cap on the value (or purchase price) of the home, and that is set county by county. The cap exists mainly because affordability varies in a given area. Los Angeles County, for example, is currently capped at $729,750, whereas most counties around Nashville are capped at $432,500. (See where your county stands.)

Another good thing about FHA loans is that they're open to anyone, regardless of income. Because even those with a higher income might not necessarily have the savings for a sizable down payment. However, FHA does watch your credit score, as would any lender. It may even soon implement a minimum FICO score of 580.

VA loans, which are available for eligible military veterans, have a zero-down-payment option for 100 percent of the loan-to-value, provided that the loan is no more than $417,000. For higher loan values, a down payment would be required and would vary based on the appraised value or purchase price.

Conforming loans, which can have a fixed or variable interest rate -- although most borrowers choose a fixed rate -- are given out by private lenders. Lenders set their own minimum guidelines for this product, but currently Bank of America requires a minimum of a 5 percent down payment for loans up to $417,000 and 10 percent for loan amounts up to $729,750.

There are some exceptions to the minimum down payment, however. A down payment of 3 percent may be allowed if the borrower's income is below the HUD median income for the area where the home is located. And, borrowers can also use a down payment assistance program to have a third-party cover all or part of the down payment.

Given the varying options for a down payment requirement, that doesn't mean that you should go out and plunk down all of your savings on the down payment. Dangani and Melinda moved from Missouri and asked the experts how much cash they should keep in reserve.

The simple answer, says personal finance expert Lynnette Khalfani-Cox, is to not overextend yourself. Homeownership comes with a lot of hidden costs, from the property taxes to homeowners insurance and repairs. And don't forget that you're going to want to decorate. All these costs can add up to thousands of dollars more than you planned.

It's not fun to be house poor -- whether you're young, or retired and living in Florida. Make sure you consider the list price of the house, your down payment and your remaining savings carefully, so that you don't end up letting your house own you instead of you owning it. That would truly be uncomfortable.

Theft of Services ?

I could be on to something here for Realtors. See also my previous blog entry which lays a good foundation for this follow up article.

If there was a Buyer Agency Agreement or Listing Agreement in place which called for X% commission based compensation for professional services (deferred or upon contingency) and the buyer or seller "drove-off" or "walked-out" on the agent after consuming his/her professional services without consummation of a sale (through no fault of the Realtor) could the agent file a criminal complaint under the larceny provisions of a state's criminal law statutes governing "theft of services" or grand larceny  ??  Why should Realtors constantly let the public get one over on us all the time with no consequences or ramifications.  As I have stated previously and in the article referenced above, I know of no other licensed profession, trade or occupation which allows the public to "screw" us time and again and go scot-free

Why should we as agents be doing "pro bono" work for the public and not be reimbursed for our costs advanced out-of-pocket and not be compensated for our investment of time, resources, energy and money on a "client's" behalf ?  An attorney or lawyer would bill the "client" for every little push of his pencil, call answered or e-mail; and the hourly par value of an attorney in the Greater Washington, DC Capital area is probably somewhere around $200 per hour.  Why shouldn't Realtors (who are also licensed professionals) also "bill" the client for our professional services or hold the consumer somehow accountable or liable for compensating us something for our time, energy and resources on their behalf ?  Consider the following below:

Code of Virginia § 18.2-95. Grand larceny defined; how punished.


Any person who (i) commits larceny from the person of another of money or other thing of value of $5 or more, (ii) commits simple larceny not from the person of another of goods and chattels of the value of $200 or more, or (iii) commits simple larceny not from the person of another of any firearm, regardless of the firearm's value, shall be guilty of grand larceny, punishable by imprisonment in a state correctional facility for not less than one nor more than twenty years or, in the discretion of the jury or court trying the case without a jury, be confined in jail for a period not exceeding twelve months or fined not more than $2,500, either or both.

Not sure what the "of another" means.  Since real estate commissions are actually paid and due to the real estate broker and not to the agent directly (but then split by the broker and paid to the agent) could "of another" mean the real estate broker who is actually the one who is being stolen from or cheated?
Either way, it appears that "theft of services" IS considered larceny (stealing or theft) and the Virginia Code does not define what "other thing of value" is (such as an earned real estate commission) and that "theft of services" is included as something of value that can be stolen; therefore, [professional] services should also be included as "services"; and not merely limited in scope to trade or communications type of "services". 

What is Larceny under Virginia Criminal Law?

Larceny is the act of depriving someone of the use of, or otherwise stealing or theft of property, goods or money. Shoplifting in Virginia falls under Virginia larceny laws.


Different classes of larceny include:

• Grand Larceny: Theft of $200 or more (Felony)
• Petite Larceny: (Petty Larceny) Theft of less than $200 (Misdemeanor)
• Receiving Stolen Property: Felony ($200 and above) or Misdemeanor (less than $200)
• Theft of Services
• Writing Bad Checks
• Unauthorized Use of a Vehicle

Therefore, if a buyer (or seller) entered into an Exclusive Agency Agreement which calls for the broker/agent being remunerated X % brokerage fee commission for the professional services of the agent (which the broker/agent defers until settlement or closing solely as an accommodation to the buyer or seller and is not construed as a waiver of the brokerage fee commission for professional services); and the buyer or seller do not proceed with consummation of a real property sales transaction through no fault or breach of agency duties and obligations or abandonment by the Realtor agent -- then the buyer or seller person HAS in fact committed theft of services or criminal larceny.  It would not be merely a civil matter to recover any deferred brokerage commission from the deadbeat client; but the act of theft of [professional] services would in fact constitute CRIMINAL larceny.

Your broker will undoubtedly give you the old platitude of "we do not want to damage the good will or name of the business" [by engaging in any such action to recover costs from a "drive-off" or "walk-out" deadbeat client].  Sure... that's easy for them to say because the broker was not the one driving the "client" around showing houses and getting screwed for un-reimbursed expenses out-of-pocket on the "client's" behalf or for the "client's" benefit, or spending money out-of-pocket advanced for a listing with marketing and advertising expenses, open houses, etc.

So, for you agents who have been screwed royally, the only support from your broker you'll probably going to get is rhetorical lip-service moral support. You may want to consider going after those deadbeat "clients" in small claims or General District Court and/or swearing out a criminal complaint for "theft of services" ....  In order to prevail, however, make sure you have an iron clad Agency Agreement contract form with stipulations concerning the brokerage fee commission (that is earned when professional services are substantively performed or rendered - but deferred solely as an accommodation to the client and not waived) and a stipulation in your agreement as well which covers buyer or seller defaults under the terms of the agreement along with the remedies for such.  Remember that promises and commitments when working with a client should be bilateral, not just unilateral on you, the agent.

Remember too as I have said in previous blog articles here, that the Association of Realtors board Agency Agreement forms (national or regional) offer no protection for the agent whatsoever and actually allow, condone or facilitate the client being able to drive-off or walk-out on us as they wish with no consequences or ramifications.  That is why I drafted my own iron clad Agency Agreement forms which are perfectly binding and legal.  Speaking of legal... make sure you also specify which state your Agency Agreement contract forms come under the jurisdiction of in the event that litigation, mediation or arbitration are required to enforce any of the terms of your agency agreement contract form with the [deadbeat] client.

If a prospective buyer or seller client is not willing or comfortable signing an Agency Agreement form with you, as their exclusive agent, which provides for fair and just compensation and remuneration for your professional advise and counsel; and the expenditure of your time, resources and out-of-pocket expenses on their behalf; then that should be a clue for you to perhaps not work with that person or those people.  If they are truly SERIOUS about buying or selling their home or trading up, and have confidence in selecting or choosing you as their agent (based on your past performance and track record of success as is evidenced by your client testimonials or referrals) then there should be no legitimate reason why they should not execute such an agreement with you which calls for bilateral accountability and performance under the terms of the agency agreement contract.  The Agency Agreement contract form should be a welcomed and embraced affirmation of your mutually beneficial working relationship with each other and promises or commitments with and to each other.

Think of it like a marriage contract or certificate or an exchange of vows.  Why should you, the agent, be the only one making promises and commitments of fidelity ?  Shouldn't the client be loyal and faithful to you as well ?  If they want a "divorce" through no fault of yours or want to just walk-out or drive-off on you; shouldn't they have to pay for something for Heaven's sake as an "alimony" payment to you ?  LOL  : )

Best Way to Cool Your Living Space

(If the video does not play correctly, switch video mode to HD in the embedded video player below)

When Did We Stop Being Imaginative or Unique ?

As I rode around Charleston, South Carolina (by birth place) and looked at all the beautiful homes, I stopped for a moment and thought; when did America stop building such wonderful homes worthy of preservation for so many years than just "cookie cutter" styles homes that a builder knows will in time just be a "knock down" ?  It seems that across America, middle class home architectural styles do not vary a great deal from "Colonial" style homes.  I am not suggesting that individual neighborhoods or subdivisions be turned into a "hodge-podge" and there should be some harmonious blending of styles; however, it would be nice to see some more truly imaginative or unique home styles for the middle class across America.

From Provincial, Tudor, Revival, Colonial, Cottage, Victorian, etc; it seems we just copied every ones else's designs.  Would a person, builder or architect in another country build a home that was [north] "American" style ?

The American Dream (of homeownership) & Illegal Immigration

Yes, there most definitely is a connection between the two!

The United States is one of the only 233 countries in the world that I know of that allows a non-citizen to own real estate!  For example, while a Mexican or Indonesian national or citizen (with legal presence here in the U.S.) can buy and own real property in the United States; an American or U.S. Citizen cannot own or buy real property in fee simple or own it as a freehold estate (absolute ownership) in Mexico nor Indonesia. I venture to say that an American citizen cannot own real property anywhere else in the world for that matter either. 

The point is; is that if nearly every country in the world has very strict immigration AND real property ownership laws or requirements, then why in the world (pun intended) does the Unites States allow nearly any foreigner to purchase and own real property here or chase the proverbial "pursuit of the American Dream" ?!  Doesn't this in fact spur or encourage more mass legal AND illegal immigration ?  Sure it does.  There is a direct and proximate corollary between MASS immigration to the United States and home ownership or that pursuit of the American dream - which is in essence or equates to, OWNING a piece of America or U.S. soil.

My mother is from Mexico and resides in the United States as a legal permanent resident.  She owns a house outright (with no mortgage) and in essence owns a piece of the United States; albeit a relatively small parcel but a piece of U.S. soil nonetheless.  Could I as an American Citizen (born here in the U.S.) own a property in Mexico or own a piece of Mexican soil ?  Hell no !! Not in the true sense of "ownership" in fee simple absolute as we know it here; without having to use some sort of trustee, intermediary, or nominee - which of course would further convolute the purchase, acquisition or true "ownership" of the property.

I might be able to acquire some sort of right of use or leasehold estate for a certain number of years in another country, but not true and absolute ownership or the "full bundle of sticks" of complete ownership of the property where I could pass it on to my heirs, etc. and not be encumbered by or with a trustee or nominee to further complicate things . And in other countries, the government can just claim "eminent domain" over a foreign owner's property with little to no recourse by the foreign homeowner; unlike here in the States.

It's such an ironic and warped twist that Mexico claims the United States has "xenophobia" (the fear of foreigners) but in reality Mexico's xenophobia is far worse. 

In the United States, only two posts — the presidency and vice presidency — are reserved for the native born.  In Mexico, non-natives are banned from those and thousands of other jobs, even if they are legal, naturalized citizens.  Foreign-born Mexicans can't hold seats in either house of the congress. They're also banned from state legislatures, the Supreme Court and all governorships. Many states ban foreign-born Mexicans from spots on town councils. And Mexico's Constitution reserves almost all federal posts, and any position in the military and merchant marine, for "native-born Mexicans."  Recently the Mexican government has gone even further. Since at least 2003, it has encouraged cities to ban non-natives from such local jobs as firefighters, police and judges.

America needs to WAKE UP and realize that cries of racism and xenophobia are nothing but lies that even the name-callers don't believe.  It's too late now and the horse (actually the entire herd) is already out of the barn or stable, but imagine what this country could have been like if we took a much stronger stand on MASS legal AND illegal immigration and property ownership rights here in the United States.  Am I a racist or a "minuteman" type with xenophobias of my own?  Absolutely not!  I come from a bi-cultural family and my wife is from Indonesia.  There is not a more culturally aware and appreciative person than myself; however, America is no longer a frontier nation and MASS immigration (both legal AND illegal) must stop!! 

As twisted as this may sound, one way of achieving that objective would be to pass laws or enact an Amendment to the United States Constitution which banned or prohibited home ownership from anyone who was not a citizen of the United States. I would even take it a step further and say that the "citizen" must be a natural born citizen of the United States. This would prevent someone (yes even like my mother) who resides here in the U.S. as a permanent resident or with other eligible immigration status from owning a property.  If they want to do that, then they need to become a NATURALIZED citizens of the United States, giving up their original nationality, or wait for the next generation of children who are born here in the U.S. and are natural citizens to own property.  Stop allowing people to have "the best of both worlds" - one foot in, and one foot out.  Would other countries allow American citizens to do this ??  Permanent resident status yes, but own real estate or truly and absolutely own a piece or parcel of another country too? Probably NOT!

Should "MLS" (Multiple Listing Service) Be Trademarked ?

I actually cannot believe that it is not trademarked! Just as the moniker of "Realtor" is a trademark (which merely means that a real estate licensee is a member of the National Association of Realtors or NAR), so too should the term "MLS" (Multiple Listing Service) be a unique trademark and not a broad generic term used by anyone who aggregates or publishes lists of real properties for sale or lease.

The term "MLS" should be reserved for only licensed real estate professionals. The generic use of this term by unlicensed groups, individuals or entities is not only misleading the public to believe or have the impression that the listing site is run by knowledgeable and licensed real estate professionals; but can also be a violation of state laws regarding the advertising of real property for sale or lease. Generally, state laws stipulate that anyone who “lists or offers or agrees to list real estate for sale, lease, rental or exchange (or) assists or directs in the procuring of prospects” is a real estate broker. The law requires brokers to be licensed by the state. 

The basis for this or the underlying foundation is to protect the public from harm, fraud or incompetence that could come about in a bad transaction with an unlicensed non-professional where giving poor or incorrect advise on matters could be potentially serious and harmful. Cases in point: not advising someone about potential lead-based paint hazards, occupancy standards (# of people per size of dwelling), using a lower level area for sleeping or as a "bedroom" where there in no means of ingress/egress in the event of fire; "steering", redlining or blockbusting where violations of Fair Housing occurs, etc. There are some exceptions to state laws however for property managers or for publications, such as a newspaper, where advertising real estate is “incidental” to a larger business.

There have been many recent court cases involving web based listing services; ForSaleByOwner.com, ZeroBrokerFees.com, and ISoldMyHouse.com where the legal issue of whether or not these "MLS" type of repositories or "services" where substantively engaged in "real estate brokerage activities" for which a license is required. The proliferation of such "MLS" type of websites not only cuts into Realtors' business; but more importantly is potentially harmful to the public by placing consumers of real estate sales or lease transactions in the hands of individuals, groups or entities that lack proper training and knowledge of the complexities involved in a real estate transaction.

Therefore, I vehemently believe that the National Association of Realtors (NAR) should be aggressively seeking to trademark the term "MLS" so that it is not a watered-down broad or generic term; but when "MLS" is used, it does give the public the sense that such a web-based site or service is run or operated by a professionally licensed real estate practitioner or broker.

Mortgages For Empty Nesters Who Are Downsizing (or re-financing)

Here's a good article and a short video clip on some mortgage options and considerations for "empty nesters" who are downsizing.  I DO NOT ENDORSE Bank of America by the way, whose representative gives a brief description of basic mortgage types. Bank of America's stockholders or shareholders got completely HOSED.  The financial analyst and The Money Coach, Lynette Khalfani-Cox, at the 2:15 mark in the video clip does give some good objective advise on other considerations for empty nesters who are downsizing or re-financing.

What Realtors Wish You Knew About Their Profession

Here is a fantastic article copied below that really hits the nail on the head and epitomizes what Realtors wish the public understood and respected about their profession. (full source article)

<< As a real estate industry insider over the past several years, but never a broker or a real estate agent, I've always thought most consumers have no idea what it's like to be a real estate agent. We all know that people resent the hell out of real estate agents/brokers and have little respect for them. I mean, to be ranked below actors and union leaders -- that's just harsh.

Real estate is a weird business. It's a major pillar of the American -- nay, global -- economy, as the current malaise shows, and yet so few people understand it.

Buying a home is the biggest financial transaction for the vast majority of Americans, and yet because they do it so infrequently, most consumers don't have a clue about a process that could put them into debt for the rest of their lives. And people's impressions of real estate agents is formed more by movies, TV shows and commercials than reality, because they simply don't interact with them often enough to gain an informed opinion.

The first and most important thing that real estate agents wish you knew about their job is how hard you make it on them.


Otherwise rational, highly intelligent, highly educated people can lose their minds when it comes to their homes. I've heard more than one story of how a Wall Street investment banker, whose day job is to take cold hard looks at companies and put values on them, simply can't accept that his home isn't worth what he thinks it ought to be worth. Why hire an expert, paying them extraordinary amounts of money (5 or 6 percent of a house sale is rather a lot), then ignore their professional advice?

More fundamentally, you don't pay for their time. Real estate may be the last pure commission job left in America -- even retail sales has notions of draw-against-commission. An agent could spend three months and a few hundred hours working for you, showing you house after house, negotiating contracts, working through difficulties, and a hundred other things besides, only to have you change your mind at the last minute and decide to buy somewhere else. The agent made exactly zero dollars from that work. (Someone is going to point out that lawyers work on contingency all the time. True, and they also take 30 percent to 40 percent of the award.)

Real estate is the only "profession" in which the professional owes a fiduciary duty to a client who isn't paying him. All the liability, all the risk, and a relatively small reward (compared to other success-based endeavors) are the hallmarks of real estate. So like venture capital (another high-risk endeavor), real estate agents practice a form of portfolio management: They expect that the vast majority of their deals will fall through, and hope that the one that hits will pay enough to cover the costs of all those that did not.  ** And that, my friends, is why your real estate commissions are so freakin' high: You, the successful buyer or seller, are subsidizing all of those flaky buyers and sellers who had a change of heart, couldn't qualify for financing, had unrealistic expectations, and so on. **

** [ I do not agree with the author's opinion, assumption and erroneous conclusion here; commissions are NOT based on any quantitative or statistical analysis of a broker's, agent's, nor region's loss to win ratio - these figures are simply not captured or realized and most agents do not even claim "un-reimbursed clients expenses" or "costs advanced" as losses on their IRS Schedule C net profit/loss tax filing statement as they should and are legitimately entitled to -- so while I can see where this author, who admits that he has never been a broker or agent, could come to such a conclusion, and it does sound plausible on its face; his statement is merely an unsupported OPINION based on no factual, empirical, or statistical foundation and is therefore a grossly erroneous conclusion here.  Also what the author does not point out in this article is that the Seller is paying the commission for BOTH agents; his own listing agent AND for the buyer's agent too; so if buyers were expected to pay their own agents, then listing commissions which range from 5-6% of settled sales price could be lowered ] **

Article continued now....

To be fair, agents share some blame, too. + If they refused to work for free, chances are the industry would have evolved in a different direction. + But we are where we are. As we will see in future columns, this particular structure of the industry creates all sorts of interesting effects that real estate agents wish you knew about their job.

+ [ this I wholeheartedly agree on, and which is why I do not work for free unless I have a retainer or deposit and am guaranteed some return on my investment of time, money and resources with a prospect or "client" ] +

But for now: Next time you're in the market to buy or sell a house, and you're thinking about hiring a real estate agent, ask yourself just how serious you are about it. Are you just testing the market to see where your house would sell for? Please try not to waste an agent's time. Are you a buyer, but don't have a clue in which of the 17 nearby towns you might be interested, or what you could actually afford to buy? Try not to think too badly of the real estate agent to whom you represent a whole lot of risk. ** And when it comes time to pay the piper, understand that you're paying not just for you, but for every buyer and seller who flaked out on that agent. ** >>


**  [ see my first editorial remark above ] **

How To Deal With Unreaonable Clients - Get Real !

After having laid down the scenarios in my previous article when you need to cut someone loose; there are situations where you can turn things around and have a good positive and profitable outcome for you and your client.  As in the lyrics to Kenny Rogers song, The Gambler, goes; real estate reminds me of a big gamble or a vicious poker game when taking a buyer or seller case on a contingency basis where you are literally betting your own funds and personal resources that you'll get a commission check out of it in the end. If you're good at "the game" you can walk away from the [settlement] table with something to count; if you're not, you can literally end up loosing the shirt off your own back.

"You need to know when to hold 'em....and when to fold 'em. Know when to walk away and when to run. You never count your money when you're sittin' at the table. There'll be time enough for countin' when the dealin's done. Now ev'ry gambler knows the secret to survivin' is knowin' what to throw away and what to keep. 'Cause ev'ry hand's a winner and ev'ry hand's a looser." 

Here are some strategies for turning those clients with unreasonable expectations or your "bad hands" your dealt from the deck of clients into winning hands if you know how to play them correctly:

Keep Their Expectations in Line

Is there a mismatch between your clients’ expectations and the reality of your local market? It’s your job to bring them back to reality and for them to get real.

Recognize How Expectations Are Set

First you must acknowledge that your “unreasonable” buyers and sellers are that way for a reason. They got their expectations from somewhere. Buyers can be inundated with negative coverage of the national housing market from the media or internet outlets, and are often overwhelmed with their choices. Sellers, meanwhile, might be stuck on the selling price of their neighbor’s house a couple of years ago, and can’t come to terms with today’s market realities.

Both buyers and sellers base their expectations on what they believe is good, reliable information; they don’t necessarily intend to be unreasonable. Rather, they believe they are being entirely reasonable based on the information they have.  Sometimes that information comes from a family member, a "friend" or an "adviser" who is pumping them with invalid or incorrect information; but who they inexplicably trust more than you, the licensed real estate professional with a proven track record of success. 

Therefore, in the initial meeting with the clients you need to address their expectations of the market and your expectations of them working WITH you, not against you. Don’t wait until they start to get upset or frustrated with you, or you with them; it’s too late by then if that happens. You have to deal with it right up front.

Get Buyers to Get Real

It’s your job to explain to buyers that while there are a lot of houses on the market right now, they don’t need to see them ALL to make a good choice. They need to know that you have been spending time filtering, culling, and carefully selecting properties for them to see based on a clear understanding of their search criteria and parameters and budget. 

If you understand what they’re looking for, you should be able to find their house within generally a few outings, or within under 30 or so showings.  Some situations are different, of course, but generally if you're buyer expects you to show them 50 or more, possible hundreds of properties something is seriously wrong which needs to be addressed up front.  If they want to pay you to be a "tour guide" indefinitely or per outing that's one thing; but if it's a contingency basis where you're getting paid the commission from the Seller at closing there should be some reasonable expectations on how long the process will take and the extents to which you will go to make sure they are happy.  Again, if they're paying you or financing that proverbial poker game that's one thing; but if they're not then that's a completely different hand you're being dealt and they need to understand how you work and what your limitations are. 

No one wants to waste time. You should be able to convince buyers that they’re going to find a great house with very little hassle and time wasted, and they should be happy to follow your plans. If you can’t convince them of that, you must accept the fact that you’ll be showing lots and lots of homes before your clients make a purchasing decision. But again all this needs to addressed or discussed up front in your initial buyer meeting consultation to avoid problems and conflicts down the road together. 

Get Sellers to Get Real

Although some markets are exceptions, home owners probably aren’t going to be able to sell their property for as much as they could have sold it five years ago. They might still be tempted to “test” the market with a price that’s not going to garner very much buying activity. That’s why it’s so important that you’re prepared to address their assumptions.  Also, you need to know what their absolute bottom line is up front and deal with those expectations.  As I tell seller clients, the more money I can sell your home for, the more commission I am going to make, so I am motivated by that and understand and respect their financial conditions or what they might expect or NEED to get out of the property and I am not trying to undersell or undermine them in any way. However, we BOTH must get real about what the market is doing and what our hopes and expectations are.  This will all be based on good factual, objective market data and research you can show them.  You should also discuss or address a plan whereby if the property is not sold within XX days or months, what the plan will be for adjusting or lowering the price.

Gather the evidence from your local MLS to show that a home priced too high will languish on the market and the adverse effect of it becoming a stale or stigmatized listing that no one wants.  Remember that even if you take this listing off of MLS, then put it right back back in with a "new pricing or marketing plan" the audit trail or total number of DOMP (days on market property) can be seen and not just the new DOMM (days on market MLS under the new listing number). Also, calculate the absorption rate and explain that pricing real estate is based on supply and demand, just like in other industries.  You also can show a seller examples of local properties that have stood on the market for six or more months. 

There's nothing worse than working with a seller who is not amenable to flexibility in their pricing and marketing plan; or one who, when is convinced to lower the price, does so too late and is constantly "chasing" the market to stay or be competitive with other homes on the market.  I would tell such a client something to this effect, “I’d love to get you the $500,000 that you need, but now that you’ve seen the numbers, I think you can see that this is not likely to happen in the market as it stands. After all, if you were a buyer looking for a house now, would you pay $500,000 for this house when all the others in similar or better condition are going for $450,000?”  The answer to this question will tell you whether they’re living in denial or not. If they stick to their guns, they are likely still living in denial. Offer them the option to sleep on it and carefully and objectively review the numbers on their own, then meet again tomorrow when they’ve had a chance to really evaluate the comps data with them.  If they don’t get real, don’t take the listing. The fastest way to have a roster full of unreasonable clients is to take on listings from sellers who are in denial.  

Also, whether they have much or any equity in the property makes a HUGE difference too.  Ask to see their most recent mortgage statement balance and don't just take their word for it how much they owe on the property.  I've had cases were a Seller has flat out lied and misrepresented how much was owed on the property or the existence of any tax liens, divorce situation or existence of a property settlement agreement, owner(s) might be going into bankruptcy, or any other encumbrance on the property which can and will affect the sale.  You need to make sure that you do not ratify a contract and attempt to go to settlement on a property unless you know the whole truth and nothing but the truth regarding that property.  You don't need to get that call from the settlement agent saying your seller client will need to bring a check for $XX,XXX to the settlement table or encounter any other "surprises." 

Give the sellers a reasonable expectation of when the house should sell, and tell them that they shouldn’t even think about worrying until after that date. Write that date on a wall calendar in their home or have them put it in their Outlook, BlackBerry, iPad, iPhone, Droid or whatever they use. Then give them something else to focus on. Walk in with a list of things that they can be doing to improve the value of their home or to help in the marketing. If they’re focusing on a “To Do” list, then they don’t have as much time to sit and wonder why the home hasn’t sold yet.

Prepare Them to Be Frustrated or Unhappy With You

Yes, that’s right. In your meetings with sellers (or buyers), you have to prepare them for the fact that at some point, they may become frustrated or unhappy with you. When things aren’t going well or the way they expect it, people naturally look for a scapegoat; and that scapegoat is often you.  Don't kill the messenger because you do not like the news.

If you prepare them for the fact that this is can happen — even though you’ve been doing your job exceptionally well — then they can be alert to avoid it. And, if it does happen, you can acknowledge that you prepared them for it, which can help to diffuse the situation. and refocus the effort.

Stuck In Unreasonable Mode?

If you have clients who won’t budge from unreasonable thinking, then you may have either failed in your objective to educate them on the facts and reality (pun intended) of the situation and to enable them to get real (pun also intended) LOL.  Or....you could have one of those clients or hands in poker that you just need to fold on and walk away from.  Remember that Kenny Rogers song....

Fire Your Bad Clients

That's right, you heard me correctly... FIRE THEM, cut them loose !  Sayonara, 厄払い , 참 속 시원 할거야, Bon Débarras, Buon Viaggio, Selamat Jalan, ¡Que Se Vayan..... or as Donald Trump would say, "YOU'RE FIRED!"

As Realtors and business owners, we might feel that we have to or should take on every client who comes calling with that "cha-ching" in our heads about the possibility of making a commission.  But that cha-ching can and does sometimes turn into "cha-chump" on us leaving us not only having made nothing, but now in the red or in the hole because of all the time, energy and resources that we've advanced [un-reimbursed] out of our own pocket on a bad prospect, client or customer.  Watch out for the ones who have totally unreasonable expectations or are just set on "picking your brain" consuming you, then running off to do it their own way... or try it all over again with Realtor #2, 3, etc.  (see some of my other blog articles concerning Buyer Agency Agreements for ways to mitigate or avoid these pitfalls)

Just because someone comes to you who's interested in a business relationship doesn’t mean they're going to be a good client. In order to make your business as profitable as possible, you really need to assess your client relationships and ensure that they're win-win opportunities for you.  

As Realtors, we take every case on a contingency basis; advancing costs incurred on the "client's" behalf from our own pockets until such time as the buyer goes to settlement/closing, or the house is sold if we are the listing agent.  Neither event always or is guaranteed to occur for a variety of reasons.  An attorney or lawyer will take a case (personal injury, tort, or civil litigation) on a contingency basis; but the big difference is their client is receiving money (if they have a good case) and large sums of it; whereas our clients are SPENDING money - so it's a completely different dynamic with regard to any type of working relationship or commitment with each other involved.      

Here are 6 types of prospects or "clients" to avoid like the plague:

1)  Focus Hogs:

These are the type of prospects, "clients" or customers who constantly need to be massaged or have attention.  They can be highly indecisive and are analysis to paralysis type of people who will suck you dry of energy, time and resources that could be used on more income producing activities or clients.

2)  Time Wasters:

Similar to #1 above and could be merged in with this category, but time wasters can never make a decision and aren't ready and willing to listen to your professional advice and counsel.  These will be the ones who consume great amounts of your time, energy and resources without ever providing anything in return.  They may question all or some of your advise and counsel and you could find yourself being consumed or having to "take them on" on every little issue or concern to prove yourself right or their assumptions and opinions wrong. 


If you have a client or customer who questions everything you do or say, run like hell !  They'll never be happy and you'll end up aggravated and loosing valuable time, energy and resources that you could have otherwise spent on a more productive client or customer.  

3)  Low Profitability Clients:

Sometimes you still be able to salvage or work with types 1 & 2 above by re-focusing or re-directing your activities or finally getting them to listen to you; but by this time it's too late and they have now become low profitability clients or customers.  Unless they're likely to give you at least a couple referrals or do business with you again; you may want to really assess the situation with these clients or customers.  If you're not generating much income, or some income, from your clients or customers then you are on the loosing end of a bad relationship.  Only work with those clients who are likely to give you a good return on your investment in them. 

Remember, typically as a buyer's agent until such time as the buyer does find a suitable home and goes to settlement on it; you'll be advancing out-of-pocket expenses on their behalf.  In some cases that could be quite some time, a LONG road to travel on, and alot of expenses advanced on their behalf. Particularly if they are a relocation client or are new to the area and feel they need to see EVERY single listing on the market in various towns or cities before finally making up their mind on a specific location, subdivision, type of property, features, etc. 

I have had clients in this category who finally did select and go to settlement on a property but from whom I never got a referral -- and it wasn't because of the quality of service and representation they received.  I have some wonderful client testimonials and accolades from clients in this category; but since I never got a referral from them, in the final analysis they were very low to zero profitability clients.  I suppose those testimonials are quite valuable in securing other business, however.

As Realtors we have a business to run and operate, however, and we cannot keep a roof over our heads or food on the table by mere testimonials alone or by carrying no-profitability or low-profitability clients on our backs or from our bank accounts.  A buying client in particular must be carefully analyzed (before AND DURING the course of working with them) to determine if you're going to be left with the short end of the stick, or worse yet, in the hole directly because of them.

4)  Something For Nothing Clients:  

Dump those prospects or clients who want to milk or rob you of your professional services for everything they can possibly get, pick your brain clean; all for either totally for free, or at deep discount.  Only work with those prospects or clients who understand, value and RESPECT your professional knowledge, experience and abilities.  If they don't value and respect you now, they never will and you'll find yourself having to justify your work, your efforts and your professional service fees.  

This is particularly true of a seller who wants to lower your commission so much so that it actually leaves you broke; e.g. 4% total listing commission, less 3% or more to be buyer broker/agent in order to bring an able, ready, willing AND represented buyer to get the the property under contract and sold -- leaving your broker/you with 1% or less for all your efforts in marketing the home and representing the seller throughout the course of negotiations and managing the transaction to settlement process.  Or a seller (or buyer) who opts for the "Limited Services Agency Agreement" but then wants or expects the full services of a "Standard Agent."  If you have a prospect or client who's constantly working you over or trying to get something (or everything) for nothing, you're better off cutting these ones loose too as they'll never be happy and probably wont give you any referrals either even if you were able to close a deal with them. 

5)  Unreasonable Expectations: 

If you find yourself working with a prospect or client who is overly demanding or who has unreasonable expectations about either your professional services, the market conditions, or both; run like hell and cut these ones loose.  

To illustrate the living, walking, breathing personification and epitome of this category take this true anecdote.  I had a "client" once I had been showing houses to for quite some time who was only qualified for $450K.  In the DC Metro area this is on the low end of single family detached homes and could be in the mid to high category of townhouses.  So when I say "only $450K" that has to be taken into relative context. The family composition was he and his wife and 2 girls.  They wanted a property on a 1/2 acre lot and with a decent house, or possibly a lot with a tear down for a rebuild inside the beltway close to Metro transportation and other conveniences.  With only $450K this was really really pushing or stretching things.  

Instead of being shown properties that fit his basic parameters and within his budget, he insisted on being shown houses in the $650K range, telling me that I should just write a low-ball offer for them and see if it would work.  This was a grossly unrealistic expectation given that it was still a seller's market AND he was not paying anything for buyer agency representation.  I told him that he would have to alter or change his must have list by either increasing his purchasing power to get within the location, size, amenities he wanted; or compromise and move further out. He still wanted to be shown properties and try writing contracts on properties that were out of his league.  It would be analogous to trying to buy a Porsche, Lamborghini or Maserati (in very good to excellent condition - with low mileage) on a Volkswagen budget!  

I told him if he wanted to pay me per outing and writing contracts (fully refundable in the event his insane low-ball offers were accepted) that would be fine and I would be happy to do that until he either ran out of money, changed his expectations or parameters, or gave up trying; but that I was not about to do that all at MY EXPENSE and also compromise my professional reputation with local listing agents.  

This guy was trying to do "short sale" offers when "short sales" where not even "invented" yet and it was still a strong seller's market and properties were being sold for at or just slightly under list price.  The story gets worse; "But wait... there's more"  LOL. On top of his insane low-ball offer expectation, he also wanted $10-15K back in closing costs when the market was only bearing $6-7K in this price range.  I showed him the MLS market area data and sales statistics to unequivocally support this; but he didn't want to have anything to do with that.  

His strategy might have worked if he was targeting only distress properties or foreclosures; tax sales, FSBO's, (for sale by owner - unrepresented) etc in the strong seller's market; or perhaps even today in the bubble burst and economic recession we are in today.  But he would have had to pay for buyer agency representation in this type of scenario rather than using a buyer agent who was being paid by the seller in a more traditional MLS type of market and sales transaction scenario.  I gave him this option as well, but he did not want to have to pay a buyer broker/agent or pay a retainer.  This also fits within #4 above (something-for-nothings). These are the types with unrealistic expectations that you just need to walk away from and let them run less experienced agents into the ground, which is exactly what I did in this case. I was wise enough to cut or minimize my losses with this guy by dropping him like a hot potato before my investment of time, energy and personal resources mushroomed out of control, got out of hand or became a colossal loss on my balance sheet.  Haile this one was for you!  You were the inspiration and poster child for this entire blog article. 

6)  Know-It-Alls:  

These are the ones who think they are experts in real estate or know the market better than you do.  They will not want to listen or be receptive to your professional advise and counsel and will expect you to pretty much just shut up and be their taxi driver and locksmith to show them properties; indefinitely or even ones they do not even qualified for to buy.  A seller can also fall into this category as well and not be receptive to doing things you suggest or propose in getting the property "curb-appeal" ready to sell, or in your pricing and marketing plan. I often wonder with these types; if they are such experts in the field, then why are they coming to a licensed professional to help them?  Because they either don't have MLS access, a lockbox key, a yard sign, or the contract forms -- but they just want to use you for your "tools" but do everything their own way.

5 Tips for Selling a Home Fast

1.  Make sure the buyer has actually been approved for the loan and has gone some of the way through lender "underwriting" and has not been merely "pre-qualified" for the loan before you accept or "ratify" that contract !

Don't just accept that lender's "approval" letter for face value without you or your listing agent conducting some due diligence or dialogue with the buyer's agent and lender and ascertaining whether there are any "conditions" of loan approval that need to be met or satisfied first, before final approval could be given by "underwriting."  There is a HUGE difference between pre-qualification (subject to verification of income/assets, credit issues that need to be cleaned up or explained, or other conditions of the loan) and an actual and true "approval" (which should only be subject to a satisfactory appraisal , title binder or other MINOR or routine conditions not part of the buyer qualification). 

2. Focus on comparables in your neighborhood that have actually been sold (not new or current listings still on the market) as a means of benchmarking or gauging your selling price.

But of course do follow up and watch those listings which may then become settled sales and show up on the appraiser's comps list.  Spending too much time or emphasis on listings that are currently active and still on the market should not be given much weight because; A) the appraiser will also not make a case or give any weight to active listings because, B) sellers can drop the price on them dramatically or overnight, C) active listing values do NOT establish, nor are an accurate or true indication of actual fair market value. 

Also, with regard to homes recently sold in your neighborhood, or those marketing cards that a listing agent sends out telling you how much homes have sold for in your neighborhood make sure you check for two elements in that list or grouping of data; WHEN the property was sold or the settlement date (not contract ratified or accepted date) AND also how much did the Seller give back to the buyer as a "subsidy" or "concession" for buyer's closing costs, repairs, etc.  In other words, a property which sold for $500K with $0 back in closing costs really sold for $500K; whereas a home which "sold" for $500K with $20K back to the buyer really only netted the Seller $480K (minus the real estate agent's listing commission as well, and pay-off of existing mortgage(s) on the property).

It is also a useful way to gauge or benchmark how much other sellers are making in concessions; so that if your listing agent or buyer suggests a certain amount back for closing cost assistance or to help subsidize the buyer on the contract, you also have "comps" for what the "going rate" or amount for that is too.  And if you, as the seller, feel everyone is asking you to keep reaching into your pocket and throwing out or down money for the transaction, you should likewise ask the buyer's mortage lender or broker to reach into their pockets too and take a cut of their "points" or charges for the buyer's loan; ask the buyer's real estate agent to take a cut of his commission, heck even ask your listing agent to reach into his pockets too.  Sure... let's ALL help the buyer out.  The seller is ALREADY paying the buyer's real estate agent commission -- what else do they want you to do; pay for the buyer's mortgage payments too and leave a bottle of Dom Pérignon champagne in the refrigerator for them, pay their moving expenses ???   Sure... it's easy for everyone else to keep suggesting that you reach into your pockets to help the buyer out, but wait until you see their faces and expression when you suggest that EVERYONE involved in the transaction pitches in or helps out too !  LOL

3. Frequent open houses. 

Comparison shop by actually getting out of your home and into ones for sale. Yes, it's convenient to view listings on your computer or Blackberry, but not until you've actually been inside or really looked at them can you really begin to measure or gauge how the competition stacks up against your property for sale.  I had a client once (Walid this one is for you) who was not amenable to lowering his asking price or being competitive with other townhouses in the cluster and kept citing his granite counter tops and other upgrades he had done to the property.  I told him, yea, they were great updates or upgrades; but the problem is, is that the others right across the street have the same or better AND are priced lower than his expectation or perception of value.  I told him, go look at the other ones for sale priced lower than his and see for himself.  Did he listen to me ?  No !  I ended up losing the listing, but the funny part of this story is that the market imploded on him right around 2005/06 and he ended up getting totally HOSED !  LOL : )  I had also been telling this acquaintance to SELL, SELL, SELL while he had the chance at the height of the market.  Penny wise and pound foolish...

4. Personalize the home's marketing for the Internet-savvy buyer.

In addition to the information put out by your real estate agent, do a parallel effort yourself too.  Put out flyers  at your work place break room (if that's allowed of course) or if your company or government agency publishes any type of on-line or in-print publication for its employees which has a "wanted" or a "for sale section" for ads put one there! Put one up at the local coffee shop where you frequent; heck you can even create a blog about your property too!  You get the point; the more comprehensive your marketing and adverting strategy is the greater your chances are of getting the property under contract and sold.  There could be someone right in your office, where you frequent, or within your "sphere of influence" or contacts that may be looking for a home just like yours.  There is even what is known as an "Open Listing" - where if you are the one who brings the buyer you do not have to pay the listing agent's commission unless he could establish that he was the "procuring cause" of you getting the contract through his advertising and marketing initiatives. Not too many listing agents would probably go for this; but it does exist and is an option to consider depending on your particular circumstances and market conditions.

5. Educate the appraiser about the home and the neighborhood.

Thanks to the new HVCC appraisals codes of conduct (which I wont go into here as I've covered it already very thoroughly in other blog articles here on my site - just do a search my site for "HVCC") there is a good chance the appraiser will not be as familiar with the subject area as you are. The problem today is you can't assume an appraiser knows the neighborhood or has access to all of the neighborhood transaction details in the MLS database, especially if they're from out of the area.  Furthermore, not all sales are conducted through real estate agents but are "arms length transaction" directly between seller and buyer.  The appraiser may not have also checked public tax records for evidence of these other type of sales which would not show up in MLS.  That could backfire on you too as the seller especially if other lower comps are found, but if there was at least one good higher value sale which was not in MLS that could certainly be to your benefit by pointing this out or proving that information to the appraiser. You obviously would not want to disclose any information to the appraiser (negative or poor value sales or condition of the property such as any defects or repairs that were needed) that would hurt or kill the valuation of your property.

In certain states, "known material defects" have to be disclosed to the buyer through your listing agent, or by you directly absent a listing agent if selling as a "FSBO" (for sale by owner) or a "URO" (unrepresented owner) notwithstanding any type of "as-is" contract clause stipulation or Residential Property Disclaimer form.  But definitely do not point out anything to the appraiser that may get your property downgraded in terms of overall condition and subsequent valuation.  By the way, if you have ghosts or poltergeist in your property that is NOT considered a known "material" defect!  LOL   : )