Banking Bailout. Banks Handle Real Estate Marketing Wrong. The Real Estate Maven

Most of the injuries that many Banks are currently suffering from are self-inflicted. Financial institutions have been holding onto more foreclosed property than it is obviously healthy for them to own. It now seems painfully apparent this is because Banks do not have a clue about marketing and how to sell the very real estate that they were so hasty to reposes.

Trying to deal with most banks about their owned properties has been like some weird form of a cloak and dagger game. It seems that most Bankers find some sort of perverse pleasure in avoiding the very thing that they need the most BUYERS.

You see the banks have made it is almost impossible for the average buyer with interest to contact them about the very property that they are sitting on and need to sell. Even though this Property is obviously doing the banks more harm than good most financial institutions refuse to deal directly with individual buyers.

Larger financial institutions have not wanted to be bothered with the individual investors. They have sought to repackage groups of multiple properties into large portfolios to be resold to institutional investors. Maybe that is all that their staffs know how to do but it is time for them to change focus.

Many Banks have acted too high and mighty to deal with the individual investors. While they have shunned the small investor they have wasted precious marketing time and now look to the government for a solution

One can find the banks identity and address from town and city records but there is never a contact person to direct inquires to. An interested buyer cannot call these institutions and submit an offer and receive a call back. An interested buyer cannot write to these institutions and receive an answer about how to purchase the property in question. There is usually no way to have any dialogue whatsoever about the very real estate the financial institutions need to sell. It’s as if they actually do not want to sell. They do not want to be bothered with the little guy only the other giants of the industry. This attitude or strategy does not appear to have proven wise.

Some of the Bank Real Estate Owned departments utilize the services of the Realtor community. From what I have seen of the properties either the Realtor was trying to hard to impress the banks in order to obtain other listings from the banks or the banks are unrealistic in their appraisals of value. Either way the pricing I have seen has been completely out of line and this is not the time to be unrealistic.

The Banks need someone in house to see the properties, accurately price the properties and then concentrate on marketing the properties to each and every buyer they can find. Marketing over the Internet is simply not that hard to figure out.

 

The enormous difference between the RTC in the 80’s and the New Bailout bantered about this September is the Internet and the potential it creates to reach millions of individual buyers. Will the banks embrace this Internet marketing opportunity and liquidate their real estate holdings to each and every qualified buyer?

 

 

 

 

 Most banks have created an impermeable barrier that the ordinary purchaser cannot penetrate.  Financial institutions have made it all but almost impossible for the ordinary buyer to approach them about the foreclosed properties that they so desperately need to sell. Strangely, most of the very banks that turn the Government for bailout assistance make it all but impossible for buyers to contact them and negotiate to purchase on their Bank Owned Real Estate. In this volatile market banks should be looking at every buyer, big and small, as a potential sale.

 

Real Estate Marketing Advice: Realtor sinks to new low! The R/E Maven

 

 

I was surprised by the comments a Realtor recently made in an article about FSBO’s in the question and answer section of www.trulia.com. What was particularly bothersome in the article was the Realtors use of scare tactics.

The Realtor questioned whether a For Sale By Owner (FSBO) female would be prepared to have someone else around, at a moments notice, to help with security during a showing.

This Realtor did give equal billing to the men by also questioning the comfort and security a male would feel about allowing strangers into the home?

Is this a new low point in the need for Listing Realtors to maintain or justify their necessity?

The fact is that most Realtors are in fact females. Are they so concerned about being accompanied by others during a showing that they refuse to perform showings if a suitable person cannot be found?

What about lock boxes? Realtors have relied upon these for years. The use of a lockbox almost guarantees that only strangers will enter the property and this will take place when there is not a soul to watch over the real or personal property.

Let’s face it showing your home is an imposition but a very necessary one in order to secure a buyer. There is no other alternative. Buyers need to enter and see.

So according to the Realtor/Author of the original article, he or she feels that the female Realtors do not need to worry about their security and can be unaccompanied with buyers but the female property owner is running a greater risk.

And the security of the male is also a problem.

The world is full of dangerous people and I do think everyone needs to take precautions and have a back up plan if possible. Simple steps such as requiring a buyer to register and then following up with a phone call or email to verify the information is a wise move.

Questioning where a buyer currently lives or works and if the buyer intends to bring along their partner (how is that for politically correct) or children is always appropriate.

But if you decide to list your property for sale with a Realtor just because of scare tactics like this then you might as well stop the mail, UPS or even the oil delivery from coming.

Remember showing do not have to occure on a moments notice. By appointment is a usual and customary situation for showings.

 

 

Realtor attempts to justify usefulness by using scare tactics on For Sale By Owners (FSBO). The truth is most property is shown and seen by complete strangers. Cooperating agents (buyer’s agents) in most cases have never been to a property before.

Simple measures can be taken to gain security in showing your own property. 

 

 

 

 

 

Real estate marketing advice: Reason number 3 why sellers need to perform property inspections before marketing.

 

Before a seller places their property on the market they need to have all property inspections performed before they self market or list for sale thru a Realtor.

 

The reasons that performing these inspections before you seek a buyer are so important include:

1. Establishment of price
2. Learning the exact nature of the property
3. Misrepresentations
4. Avoiding price renegotiations
5. Error and omissions insurance coverage
6. Maintain arms length negotiations
7.  

Reason #3 concerns misrepresentations or more accurately how to avoid making misrepresentations.

When a truly interested buyer looks at the property they will most likely have questions about the property. Since the Realtors cannot be relied upon to provide the answers, a seller needs to be able to turn to someone or something else for the appropriate answers. The buyer’s real estate agent will not be familiar with the property so they cannot be expected to know and if the seller is unlucky enough to have a listing agent, these agents and their own forms make it perfectly clear that all their information comes from the seller anyway.

So what a seller needs to do in order to have correct answers available is to have a professional property inspector perform the necessary inspections before the property is put up for sale.

 

There are four ways in which a seller can handle property specific questions:

1. From the information on the inspection reports
2. Information that the sellers definitely knows the answer to (NO GUESSING)
3. It is perfectly acceptable to respond that the seller simply does not know the answer
4. Provide the buyer with the opportunity to obtain the answers elsewhere.

 

Remember that incorrect answers can later be interpreted as decieptful or misleading answers.

At some point in the sales process it will become inevitable these reports are performed.

It is entirely in the SELLER’S BEST INTEREST to maintain this control and have these inspections performed at their own expense. It will always save the seller time, aggravation and money.

 

Sellers need to be cautious in order to avoid any claims of misrepresentation. Although this can be done innocently enough it is easy to avoid by simply having a property inspection performed before they market their property.

 

Internet marketing companies are rallying to help Buyers but are leaving the Sellers out in the cold.

 

 

Another Internet marketing company is joining the ranks to give advantage to the Buyers. Real estate search engine HomeSpace has unveiled their latest feature, HomeValue, which allows Home Buyers to determine their negotiation advantage on real estate that they are interested in.

By making past listing and past transaction data available to the public, HomeValue boasts they now offer the most number of pro-consumer features to help consumers effortlessly obtain said information.

Once again this industry, much like the real estate industry itself is moving away from the Sellers and concentrating on the Buyers.

Appraisers do not pay attention to what a certain parcel of real estate had originally sold for or what the property had been listed at and how many listing price adjustments a seller had made. Appraisers set a value using several methods, none of which are based on the information these Internet marketing companies feel it is so important to share with the Buyers. It is public information to be sure but it has nothing to do with establishing values and will only confuse negotiations and harm the Sellers

Does the price paid for a Cadillac effect what it is worth as a used car? What if it is 10 years old? What if it is a 40 year old mint condition classic that the owner had paid only $700.for back in 60’s? Will that stop the seller from obtaining a bid of a quarter of a million dollars at one of the Arizona auctions?  Will any buyer at the auction point out to the seller of the classic Caddy that he or she had originally paid $700 for the car so they are now justified in offering only $600 for it?  It does not matter what was paid. It matters what the current market value of the property is and that cannot be established by what these services are providing!

This wholesale movement away from the Seller and towards the Buyer will have dramatic effects upon the sellers and the marketplace if things continue in this direction.

 

 

Association of Realtors Conflict of Interest with Deposit Money.

 

 

 

Some Association of Realtors listing contracts allow the Broker to keep one half of the Seller’s deposit money if the Buyer defaults.

This permission is snuck into some listing contracts and most Sellers do not know what they have committed to until it is too late.

“In the event a buyer defaults on the buyer’s obligations under a purchase and sales agreement and forfeits deposit money to the SELLER(S) as liquidated damages, whether by agreement of the buyer or otherwise, the BROKER and SELLER(S) shall share equally in the liquidated damages for that transaction providing the BROKER’S share may not exceed what the commission obligation would have been had the transaction closed. BROKER and SELLER(S) agree any such monies received are for liquidated damages and not commission.”

There are several enormous conflicts of interests with this type of treachery.

It is common for the Seller’s attorney to add a clause into the purchase and sale agreement that the commission will only be paid to the Broker “if as and when the deed is recorded and all monies have been paid” to the Seller. The Realtor’s job is not considered complete until the Seller has actually been paid in full and the Seller no longer owns any interest in their former property.  The Realtor will not be paid until these events occur and the transaction has been entirely completed.

How does the Seller’s Attorney include such a clause for the benefit and protection of the Seller if the Seller has signed this form at listing time, which is usually months before a Buyer has been found and the Seller has hired an attorney? Are Realtors avoiding the Seller’s Attorneys by adopting this language very early on in their relationship with the Seller?

The Realtor’s Association is entirely deceitful in the wording of this clause. Notice the Realtor has the Seller agree and sign that the Realtor’s half of the deposit is not to be considered commission but rather as “liquidated damages.” This is done to allow the Realtor to double dip. The Realtor can now receive the commission as well as one half of the deposit money, if they are lucky enough to find a second buyer.

How does this Realtors Association justify their behavior in all of this? If the Realtor sells the property they might receive a 5% or 6% commission but if there is a problem with the transaction they all of a sudden become the Sellers partner and get one half of the Seller’s deposit money. This will be many thousand of dollars. What liquidated damages has the Realtor suffered as compared to the Seller?

Instead it could be argued that the Realtor has not performed their job at all and does not deserve a dime. If the transaction has hit the point that that the Seller is entitled to keep the Buyer’s deposit, whether in court or by right, it is obvious the realtor involved did not secure a ready, willing and able Buyer for the Seller and should not be paid until they have done so and the transaction is 100% complete.

 

 

 

Sellers need to get a commitment from Realtor before listing property.

 

Money is tight in real estate and real estate sales offices are no exception. Even the large national brand offices are cutting back on expenses and the largest expense that they have is their advertising budget. They are all hurting and cutting back on what they spend.

 

For your property to sell effectively it needs to be priced accurately and to be exposed to the entire marketplace. If this is not done because the Realtor’s office has financial constraints then they are doing you and your property a complete disservice.

 Know one knows where that one perfect buyer for your property is going to come from and you cannot afford to let anyone squander away any opportunity.

Spend some time and check out the agent you are considering too hire. What do their current listings look like on the other Internet marketing sites such as www.zillow.com, www.Googlebase.com, www.point2homes.com and www.trulia.com.

Are the descriptions great, is the agents bio and picture complete, are there plenty of pictures and do they utilize at least eight to ten of these sites? Remember that most of these sites are free so all that is required of the agent or their office is some attention to details and if they do not handle this properly you need to wonder what else they might be missing

Just as importantly because this is what the real estate office is actually going to need to spend some money on, you need to obtain an actual commitment as to where and how often your property will be advertised. This includes online newspaper advertising. Remember the majority or buyers use the Internet to search for property. Online newspaper advertising is a great vehicle to use. In most of the major newspapers it only costs about a dollar per day. So an excuse not use exactly what will cover your market is not acceptable.

 The reason that you need an actual commitment is that the larger offices have set papers that they use because they buy their online newspaper listing space in bulk. They save money by limiting their ad placement to these certain publications. If your property is not located in the particular marketplace where their set bulk buying relationships are it does you little good. An ad in the Wall Street Journal might be impressive but is it really a draw for your property?

 You as a seller need to prepare ahead of time and seek out which newspapers, large and small, serve your market area the most effectively. If you are not sure which newspapers cover your area then a good comprehensive source to start with is www.newspapers.com.

 

At listing time it is only appropriate for the Seller to demand that an advertising schedule be established and agreed to ahead of time.

 

 

 

Information can and will be used AGAINST the Seller!

Sellers beware! Your Realtor and many of the Real Estate web sites are sharing marketing statistics about your listing with potential Buyers that can and will be used against you. Monetarily.
The number of Days that your property has been on the market is a commonly shared statistic.
Your Realtor, through the Multiple Listing Service, makes this information available to all the Realtors. This includes the Buyer’s Realtors.
In fact, when a potential purchaser becomes serious about your property, they will invariably ask “how long has it been on the market?” Your Realtor is the responsible party that provides this potentially damaging information. The Buyers and their Agents will then be able to use this information to their best advantage. This is clearly not in the Sellers best Interest.
If your property has been on the market for 14 months do you think this empowers a Buyer to become more aggressive in their negotiations with you? Of course it does.
Why does your Realtor or other Internet websites share this information with anyone? It has absolutely nothing to do with the condition or value of your property.
There is no other nonperishable product in the world who’s value is affected by such a foolish time stamp and your Real Estate should not be the exception.
The frightening aspect to this is that it is the very people that are sworn to uphold the Sellers best interest are the same one’s providing this same information that will be used against the Seller.
For the Seller’s sake this system that co-mingles information and differing interests needs to change.