February 27th, 2014
There are lots of different ways to get social with FSBO.com! Make sure to interact with us and post your property on these sites for added exposure. The more people that see your property the better! Here are our most popular pages…
Facebook - https://www.facebook.com/gofsbo
Twitter - https://twitter.com/fsbo_com
Pinterest - http://www.pinterest.com/gofsbo/
Google+ - https://plus.google.com/+Fsbo1
YouTube - https://www.youtube.com/user/FSBOcom
Which social media sites do you use the most? Have you posted your property on any? Did you receive any leads? Let us know what you think!
February 20th, 2014
My current automobile is 10 years old and I have had very little trouble with it. The few times I had any problems, the manufacturer was very good at taking care of me. I am not ready to trade it in yet, but when I do, I plan to buy from the same company. If they ever sent me notice that they will no longer service/support my model I would not buy from them ever again. Same is true with my home appliances. All are now 13 years old. They work fine, the manufacturer supports any service needed.
I can not say the same thing about my computer manufacturer. I have been very happy with Windows XP and Microsoft Office 2003. For over 10 years both have worked fine, with very little trouble. Now, the manufacturer is discontinuing support. See article. It’s the big count down to April, 2014. I guess when you are a $300 billion dollar company Wall Street expects you to keep pumping up the sales and profits. New versions do this. That is why companies keep coming up with them. Yes, I understand security is a big issue. Hackers are creative and you have to continually protect your computer with upgrades. It just seems like a $300 billion dollar company would take care of it’s customers so they come back the next time they are ready to buy. As a business owner, to make a sale, it cost much less to have current customers come back and buy from you then it does to go out and find new customers.
Anyone else still using Windows XP and Microsoft Office 2003? (We should note that most of us at FSBO.com are using much newer versions of Windows and Office.)
What products do you own that are over 10 years old that still work fine even though newer versions of the same thing have come out?
February 5th, 2014
On December 31, 2013 the Mortgage Cancellation Tax Relief Act expired. Currently the US Senate S187 and the US House HR 2994 bills to extend the Tax Relief act retroactive have been stalled. I attended a meeting last week with Johnny Isakson, Georgia US Senator that co-sponsored of the Senate Bill, and he said the longer it takes the more unlikely it will pass. Who does this affect?
Since 2007 and ending Dec 31, 2013, any home owner that received ‘debt foregiveness’ through a ‘short sale‘ or ‘mortgage modification‘ or a ‘mortgage refinance‘ did not have to claim the debt reduction as taxable income. Now, without extending the Tax Relief act, they will. As an example: 1. You owed $250,000 on your property and the mortgage company reduced it to $200,000 so you could stay in your home. Today, you would have to add the $50,000 as taxable income, so you would owe the IRS about $14,000. 2. If you owed $225,000 on your home and you sold it as a ’short sale’ for $125,000, you would have to add the $100,000 as taxable income and owe the IRS $28,000.
What this means to the real estate market in 2014. 1. Less inventory because under water properties will not be coming on the market. 2. Less refinancing using the HARP program. Who loses: any profession that makes money off of the closing of a real estate sale or refinance; such as: agents, closing attorneys, appraisers and mortgage brokers. Who wins: Less inventory means prices will go up for those properties coming on the market. In coming months we look for a less inventory and a continued increase in sale prices.
February 3rd, 2014
Establish the foundation for the negotiations. Is the other party serious, or are they wasting your time. Don’t negotiate if the other party is not serious. How do you know? First, have them prove it. Is the buyer willing to put to a healthy deposit, close fast and willing to shorten up their due diligence period. Is the seller willing to wait until the mortgage company, home inspector and appraiser do their work. You need to find out this information fast. I mean as soon as the buyer looks at the property for the first time. Be blunt. Come right out and ask. By asking the other party you will know if they are serious. If you had an agent, they would be blunt about finding out how serious each party is. Without using an agent, you need to ask the tough questions at the first meeting. Second, who is going to handle drawing up the purchase agreement, hold the deposit, schedule a closing agent. Again, you need to establish this with the first meeting. These are all of the foundation items needed to get the property to closing. Get these items out of the way. Then you can start negotiating the small items. Have you ever read about the negotiations the US has with other countries. Before they sit down at a meeting they establish the location, whether the table will be round, square or rectangular, and they establish the agenda. The negotiations begin before the meeting.
January 31st, 2014
Quick steps to think about before entering a negotiation situation: 1. Be Prepared 2.Take Your Time 3.Don’t take it personal 4.Ask for more 5.Speak, then shut up 6. Be friendly & fair, but be firm and unyielding if necessary 7.Know the other parties motivation!!
For sellers, when the buyer shows interest in your property. They tell you they like most of what they have seen, but they have a few problems with some areas of the house, such as; bedrooms are too small, too far of a drive to work, power lines in the back yard, no garage, etc. These are items you can not change, so don’t try to. Instead, focus on what they like. In all cases, there is one item that they really like. They might like the open kitchen with lots of counter space (because they like having family over for dinner) or they like the extra room in the basement (because they need a workshop) or they like the flat back yard (for their kids to play), etc. You need to use this information as often as possible. Any time they mention a negative, remind them of the positive. Turn every comment into a reason to move forward.
For buyers, know the reason the seller is moving. It may be a job transfer or new job, it may be a new house already purchased, it may be a personal reason. Find out and use it. Also know, how they came up with the price. Most sellers know they will receive offers below asking, be prepared with why you are offering a lower price.
January 28th, 2014
Handling a low appraisal. What happens next? Either, the seller can lower the sale price, the buyer comes up with more money, the contract is cancelled and the house goes back on the market or you can negotiate. Where do you start? Write down all parties that have a stake in your property closing. There is the buyer, seller, maybe an agent, maybe a mortgage broker, closing company, etc. If the contract is cancelled nobody wins. Everyone with an interest in the closing needs to compromise. My most recent experience was a house ‘under contract’ for $115,000 had an appraisal come in at $112,000. The seller was initialling willing to put up $4,000 in closing costs and the buyer was taking the down payment of $3,300 out of his 401k. Who was going to give in? The seller refused to lower the price and the buyer had no more money available. Seemed pretty hopeless until the mortgage broker stepped up. Yes, the mortgage company has a lot at stake to get the property closed. The seller agreed to lower the price to the $112, 000 appraisal but only put up $1000 in closing costs so they came out the same. The buyer agreed to a higher interest rate on the mortgage, which made the payment slightly higher, but he was getting the property for $3000 less. And the mortgage company was able to sell the mortgage to a third party at a higher premium and came out about the same. Each case is different. You need to understand the motivation of all parties. You need to be prepared to walk away if necessary. Walking away is tough to do, because you become emotional about the situation. You must take ‘emotions‘ out of the equation when negotiating.
January 23rd, 2014
Keep control!! First, keep control by asking the questions. In a court room when the attorney is asking questions, who is in control? When your boss has you in his office asking questions, who is in control? When the police pull your car over and asks questions, who is in control? When your children walk in and you start asking questions, who is in control? During negotiations, the one asking questions is in control. Ever see a politician answer a question with a question? All the time. They are trying to reverse the dialogue and keep control. Next time you are looking for a new car, TV or home appliance and the salesperson starts asking you questions, well, they are trying to keep control. In real estate, either the buyer, seller or agent wants to have the control. Who is asking the questions and who is on the defensive coming up with the answers. It’s Okay to answer a question, but make you sure you complete your sentence with another question. This is not easy to do. Practice a little. Look in the mirror and role play. Professionals train by role playing all of the time. The attorney, police, your supervisor, an appliance salesman and the real estate agents all practice. Also, you need as much knowledge of the subject matter as possible. Whether discussing the sales price, market value, any improvements needed, the mortgage company, title company or closing information, you need to know everything. Ever hear the expression: “attorney’s never ask a question unless they already know the answer”. Avoid any surprises. Do some homework and be knowledgeable.
January 22nd, 2014
Mark Dantonio, the Michigan State University head football coach, after winning the Rose Bowl this year was told the University of Texas wanted to talk to him about coaching their team. When asked who his agent was, his reply: “Have them talk to my wife”. Even with million dollar contracts at stake not everyone uses an agent. Selling your home without an agent? Sure you can, but it takes work and negotiation skills. What does negotiation mean, according to Wikipedia: it is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy various interests of two people/parties involved in negotiation process. Negotiation is a process where each party involved in negotiating tries to gain an advantage for themselves by the end of the process. Negotiation is intended to aim at compromise. There are several key words to understand, such as; dialogue, resolve, bargain, agreement, advantage, etc. I find that starting a negotiation means both parties need to understand the situation from the other side. You know what you want and you know why. Do you know what the other party wants and why? The buyer has plenty of houses to look at and the seller, at the right price, has plenty of buyers. But you only need one. You need to work with the best one, the one that fits your needs. Do you have to give a little? Usually you do. Will the other side give a little? They should otherwise you can just walk away. There are plenty of articles, books and courses on negotiation. One thing I learned with my first sale a long time ago, just because you have a contract signed does not mean the negotiation process ends. There are many variables that cause more negotiation. Things like the home inspection, the appraisal, the termite letter, the mortgage companies rules, etc. In the next several blogs I’ll try to highlight important areas of FSBO negotiations.
January 15th, 2014
How does a college determine who gets accepted? It starts with your grade point average, plus other factors. How do you get into the baseball Hall of Fame? It starts with your batting average, plus other factors. How do you get a mortgage to buy a house? It starts with your credit score, plus other factors. Planning to buy a house in the next one to two years, then you need to know your FICO score. FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score. The Fair Isaac Corporation is a for profit, publicly traded company with a market value of $2 billion. Their sole purpose is to help financial institutions make decisions on who gets a loan and what interest rate you will be paying. The higher your credit score, the lower the interest rate. Scores can be between 300 to 850. It is a very complicated mathematical formula that uses your payment history, current indebtedness, types of credit used and length of credit history, and new credit to determine your individual credit score. Your score goes up and down monthly. Federal law allows you to check with any of the three main credit companies to see your score. They are Experian, Transunion, and Equifax. Here is a link to your credit score. Generally a score of 650 or higher is considered good and a score below 620 are bad. Your mortgage person can help you identify which mortgage loan program works best for you.
The latest news for the mortgage industry is that they are finally loosening their standards on who gets a mortgage. In 2012, the average credit score for a person approved for a new mortgage was 748. Last year the average score was 738. In December, 2013 it dropped to 727. This means the banks are lending to persons with lower scores. Remember in 2010 -2012 how tough it was to get a mortgage, well today it is much easier. It’s funny how the banks have loosened while the interest rates have risen. In other words, the higher rate the receive the looser they get. I expect rates to keep rising this year and the banks to keep loosening.
January 10th, 2014
PRESENTATION!! Starting with the end of the process. a)The buyer will not sign the Purchase Agreement if they look sloppy, haphazard, and unprofessional. FSBO contracts can help. b)The buyer will not look inside your property if the exterior does not look good. Have you ever gone to look at a house and you were standing at the front door and thought to yourself “I really don’t want to go in”. I always recommend, ‘Go out to the street and take a picture of your property”. Look at it. Study it. This is what the buyer sees and makes their first impression. You only get one chance at this. You want the buyer to be excited to look inside. c)The buyers will not call or email you if your marketing looks sloppy, haphazard and unprofessional. Marketing these days start with the Internet. Look at your property on Zillow.com. You need to claim the property and fix the information, plus add updated photos. You also get a chance to explain your sale price. Next, make sure the website you use can professionally display your property and photos. No one does this better than FSBO.com. Unlimited photos, unlimited wording, no pop up/distracting advertisement, professional looking brochure, professionally/custom made yard sign, etc. Make ‘presentation’ your top priority in selling your property and keep the buyer excited throughout the process.