Low Ball Offers: Still Offers to Be Negotiated

One of my observations in this current market is the difference between the complainers who seemed to be challenged in getting anything to close and the problem solvers who look at the challengers as opportunities. You are successful or not. There is no longer an in between.

There has been a lot of moaning and groaning about low ball offers. If you don't get the offer there is no opportunity to turn it into an executed contract and eventually a closing. If the buyer's agent can get his client on paper and an earnest money check they now have an emotional attachment to the property.

It is the seller's agent job to take the offer and get their client to counter the buyer. In some cases it is a matter of getting the seller to be realistic to the value of the property today. In other cases it is going to be keeping the buyer engaged until they get to terms the seller will accept.

It is called negotiating. That is why buyers and the sellers hire real estate professionals. We are the middle men that take the emotion out of the negotiation and get the job done in the best interests of our clients. Not every offer will work. Not every one will close. It is not where you start it is where you end up: The closing table.

The Chicago 77 - Chicago's Neighborhoods starting with Edgewater

For many months I have been writing about market updates and observations for the Chicago 77 Real Estate Blog.

The blog was started by Rod Holmes to speak to Chicago's real estate market. Rod is a partner in Chicago Style SEO working primarily with real estate firms to improve their Internet marketing. The blog name comes from the 77 official community areas that make up the City with Big Shoulders. As I was writing my update for Monday, it occurred to me I have never really told the stories of any of these communities, many in which I have lived, worked in and enjoyed all they have to offer.

As an active member of the Goverment Affairs Committee for the REALTORS®, as well as chairing the committee on and off throughout the last decade, I have had the wonderful opportunity to visit all 77. I have gained great insight through Brian Bernardoni, the Govermental Affairs Director for the Chicago Association REALTORS® driving and walking the streets, visiting with members, businesses and residents as well as the local alderman.

Next week I will be taking on that leadership postition again for another year. I look forward to getting back to Chicago's gems again, its neighborhoods,

Today, my first neighborhood story was posted. I started with number 77 first and will be zigzagging through the city over the next months. Please read my short story about the Edgewater neighborhood.

Price Changes Continue to Drive the Market

In the first week of the Fall 2009 real estate market 26% of the homes currently listed for sale in the United States had price reductions according to Trulia. This is the fourth month in a row that there has been an increase of price reductions taken. Locally, Chicago's active listings saw an average price decrease of .4% last week. List prices are down overall 18.5 % compared to last year.

With sellers aggressive sending out the message they want to sell by lowering prices buyers have been re-engaging in the market place. Many Realtors®are getting more showings on the listings resulting in multiple offers in some cases. With the decreases in the price of market rate properties, many buyers are opting not to go after distressed properties to avoid issues that can arise in short sale and foreclosure transactions such as undetermined closing dates and the cost of fixing up the properties.

Some sellers are opting to remove their homes from the market rather than sell at a further reduced price. The question remains as to how long will they have to wait it out. A few who have to move are trying to rent their homes in an over saturated rental market. Rental pricing is not always meeting the monthly expenses on the properties.

If the property is priced more than that local market can bear it still won't sell even with the price reductions. When putting together offers, buyers and their agents are basing it all on the last three closed comps in the last 90 days.

To follow Chicago Area Listing Inventory and keep up to date on new listings and price changes click here

Chicago’s Fall Market 2009: Buyer, Seller, and Agent Expectations

The week after Labor Day traditionally marks the beginning of Chicago’s fall real estate. As this has been a period of non-traditional activity, I have thought carefully about what are my expectations. The strengths and weaknesses in the marketplace will depend on what type of property in what area at what price. There is no blanket citywide answer. The one constant about Chicago real estate is that it is local to the building, the block, and the neighborhood.

Buyers
Overall there will be fewer home buyers out there than in years past but more than we have seen in the first months of this year. The majority of buyers have gotten themselves in a stronger position financially, coming into the transaction with larger down payments or just paying cash. Those who have the wherewithal to purchase are now actively engaging. These buyers have the opportunities to take advantage of short sales and well priced homes. If they are contracting to purchase a short sale they must have a clear understanding, no matter how financially qualified they are to buy, that the transaction is controlled by the sellers’ lenders.

The strength of the lower end/first time buyer will depend on how the government reacts to the rising default rates on Federal Housing Authority (FHA) loans as reported in the Wall Street Journal. If FHA is forced to tighten its guidelines it will impact a large number of new construction and conversion condominiums which have typically been entry level products. FHA loans became popular with the demise of subprime mortgages, enabling purchasers to get into homes with only 3.5% down payments.

Sellers
Regardless of market conditions it is still about the space. If the space works for the potential buyer then pricing becomes equally important. Over the last months home values have been leveling off. With that said, overall values are significantly lower than in years past. A home’s value is based on the last three sales in the last six months of comparable properties. Because of specific areas of high inventory levels, high rates of default, and foreclosure there are still pockets of the city that will continue to see devaluation.

What you paid for the home factors into your decision to list. Can you afford to sell it now for the current market value or do you have to sell? If you have to sell, will it result in a short sale? Most listings will not get many showings but each and every one is an opportunity.

REALTORS®
There continue to be far fewer of us. It is down to 10% of real estate professionals doing 90% of the business. To get a transaction closed is a combination of the years of expertise, number of transactions, and the experience of working as a REALTOR® in this perfect storm of the last eighteen months. These are the agents who have the skills to bring the offers, get them negotiated, and get a higher percentage of successful transactions in an environment where many contracts never get to the closing table.

The marketing of properties has changed as quickly as the real estate market itself. It is no longer about the Sunday paper, the glossy magazine ads, and entering listings into the MLS. It is all about Web 2.0 and social media. Knowing how to use the brand your brokerage offers, supplemented by the brand you have created for yourself as an agent to get your listings the greatest exposure. A professional agent must know where listings go and how to get them optimized. Saying, “the listing will go into the MLS and will be on the Internet” is not providing a service.

With a decade of experience as an active REALTOR® I am optimistic. It is about overcoming objections, finding solutions, and understanding how to market. It is also gaining knowledge from my transactions as well as from the expertise of my colleagues. It is about constantly educating myself to accomplish what I am hired to do: the sales and marketing of real estate.

The Facebook Friend vs The Twitter Follower

Trying to be an efficient social networker, I make it easy for myself and use the tools out there. What I post on Twitter automatically goes to my Facebook page. When I post on my Activerain Blog it automatically goes to Twitter which then goes to Facebook and so on and so on and so on. I really don't go on Facebook that often except to read a chain of comments when I am alerted, check out other friends once in a while or play games.

It finally occured to me why the @(reply) or dm(direct message) responses on Twitter are always so different than the chain of comments generated on Facebook with the same message. It is not a good or bad thing but demonstrates the difference of the two mediums.

Tweeters read the tweet and if they get so enticed they click on the link and read the surprise they open up and then respond. If the follower thinks it is worth sharing they then create the viral effect of RT(retweeting) spreading the insight of the message. They always anticipate some new life changing knowledge if they just click. If there is no link that 140 characters or less must be profound or else why would I be following you.

Facebook friends respond to the 140 characters or less without clicking through the link to read the post. Many times they are missing the intent of the message not taking into consideration all the information presentated and their comments reflect that. Many times the comments are amusing because you can tell they totally missed the point. Facebook friends are very into their comments.


Followers on Twitter seem to be all about the sharing of knowledge. Facebook Friends tend to share themselves.

I thought this tweet twittered today says it all: AndreaRealtor: RT @Swanepoel: RT @MIrealestate - Read somewhere that sharing is a human quality and a core principle of Web 2.0 and Social Media.