Open Houses & Showings: The Good, Bad & Ugly!

I'm guessing that if you are reading this and you have sold a home you have also had an open house. How did that go for you?

Open houses provide additional opportunity to advertise, they provide traffic through your home, they can get the home a little more attention than it might otherwise be experiencing. These all sound like good things and in some cases they actually lead to finding a buyer.

The open house is an excellent resource for Realtors to pick up buyers. Realtors who are hungry for business will do open houses to meet potential buyers before they have started a relationship with an agent. Most open house visitors are out getting a feel for what the market has to offer and they have not yet decided to find an agent they trust to help them with their search. This is prime time for the visitor to meet Realtors while they are viewing homes and they will find someone they are comfortable with. I don't think that people realize they are doing this. They are more excited to look at houses. Once they become ready to buy they will often go back to one of these agents they met, remembered and trusted.

Many fellow agents tell me they have sold homes from open houses. The majority tell me that they are only there to pick up future buyers and that they don't expect to actually sell the home they are opening.

My experiences have left me somewhat sour on the process. I see all of the neighbors, not a bad thing though, they may know someone who is interested. But...do you really want them roaming through your home and nosing into your personal life? As an agent I would constantly be on guard watching to make sure that no pilfering was going on, making sure that no windows had been unlocked leaving a method of entering into the home later when unexpected and unwelcome, medicine cabinets are left untouched, etc.

It is my opinion that couples with young kids NEVER have an open house. Why would you want to allow a stranger to know the layout of your home, to know there is a child living there, and to create an easier opportunity to hurt you and your family?

If you have medication that would be desirable to someone for a non-medicinal purpose, prescriptions with 'street value' and you want to have an open house then you need to remove all of these items and take them with you. Please do not leave them in the home.

If you have small things of value laying around your home you should put them away in a safe place where they are out of sight.

Realtors try so hard to follow visitors around and make sure that they are monitored but if you get more than one family or group of visitors into the open house it becomes impossible to be everywhere. We also try to monitor clients who we are showing but sometimes it gets difficult. If we have a couple and they go two separate ways, we are only one person. Get it? I've had sellers be upset because a buyer locked a door that wasn't locked when we arrived, they opened a blind they shouldn't have, the messed with a thermostat and left it very low or high, they just sometimes do things that they don't think about and the agent has no idea.

All of these same risks exist as we show your home to our client for a potential sale however, we pre-screen, we have addresses & contact info, we pre-qualify with a lender, we are building a relationship and we know who we have in your home. This certainly helps to limit risk.

By the way, for all of you For Sale By Owners out there, let me offer some advice. NEVER show your home to a stranger (male or female) all alone unless you have someone aware that you are showing it and waiting to hear from you once the showing is over, make sure the prospect knows that someone is looking out for you and is aware that you are showing at this time. Be sure to get an address, phone number, place of employment from the prospect prior to meeting them and verify that they are who they say they are. The internet makes this a little easier these days. I will always call the client back at the number they left and try to call their place of employment and ask for them prior to meeting them. It just helps to know that they are who they say they are. In our office our receptionist or another agent knows when I am out with a buyer. When this buyer is a stranger to me they will meet me at the office, the receptionist will see them, see the car outside, know when to expect my return and the prospect is aware that everyone knows that their car is in the parking lot and they are with me in my vehicle. You can't do that when the buyer is coming to an open house or meeting for a showing.

Another safety concern for FSBO sellers and agents in an open house or on a showing, don't ever enter a room in front of a stranger when there is no other exit but the one you came through. You do not want to get yourself into a room you can't get out of without going past a person who could do you harm. When preparing for an open house I will arrive early, go through the home and unlock all exterior doors and taking note of all exits. I will always keep an exit behind me - always. I will always be in a position where I can turn and run to get away if need be. The most common motive for harm against a Realtor on a showing or in an open house is robbery. We often think of people who would want to cause us harm as being far and few between because most normal people would have no motive to hurt us. We don't think about the opportunities we provide for someone to rob us of our wallets, personal possessions or to rob the seller of personal possessions in the home.

Food for thought...

Mortgage Scams by Dena Lee

Buyer Beware is the name of the game when it comes to taking out a new mortgage or refinancing your exisitng mortgage.

At the time of application for a mortgage the loan originator is required by RESPA law to provide you with a truth-in-lendings statement and a statement of the costs, APR, terms, etc of the loan that you will qualify for.

Mortgage Scams ... Beware!

You are going to hear more from me about scams than you might care to hear. I'm just over it! I can't believe how people have been taken advantage of and I hope that I may be able to prevent you or someone you know from falling victim to such acts. Unfortunately many of these scams have come from untrustworthy mortgage brokers. Don't think I mean all mortgage brokers, there are a few of them that do a fine job but so many have jumped into the marketplace as they have little regulations. Most states are working toward correcting this. Encourage your state representatives to support these types of laws.

Realtor Magazine, January 2008, Gino Cischke writes:

A Scam in Five Acts

1. Bill, who has owned his home for nine years, loses his job and faces foreclosure.
2. Unscrupulous XYZ Finance says it will pay off the mortgage, cover closing costs, and give Bill $20,000 in cash, in return for a quit-claim deed.
3. XYZ also will let Bill stay in the house, paying rent at twice his former mortgage payment, with the promise he can buy the home back later.
4. Bill bites, figuring he'll use the $20,000 to cover his rent until he gets a job. He deeds over the house to XYZ for about half the home's value of $400,000, giving up his equity.
5. In a few months, Bill can't pay the new, higher rent, and XYZ evicts him.

How is the Bloomington Market???

BETTER THAN YOU THINK!

The list to sale ratio (Sales Price Compared with Listing Price)

Year End 2007 U.S. ..... 97% Indiana ..... 98% Bloomington 97.1%

Comparing the years -



Market Comparison Residential Homes Sales in Bloomington MLS

List Price Sold Price DOM List to Sale
Ratio

Dec-06
List Price $17,179,891.00
Sold Price $16,549,150.00
Days on the Market 106
List to Sale Ratio 0.963

Dec-07
List Price $21,461,230.00
Sold Price $20,735,809.00
Days on the Market 114
List to Sale Ratio 0.966

Difference
List Price $4,281,339.00
Sold Price $4,186,659.00
Days on the Market 8
List to Sale Ratio 0.003


Jan-07
List Price $11,508,012.00
Sold Price $11,113,382.00
Days on Market 110
List to Sale Ratio 0.966

Jan-08
List Price $13,689,503.00
Sold Price $13,327,773.00
Days on Market 127
List to Sale Ratio 0.974

Difference
List Price $2,181,491.00
Sale Price $2,214,391.00
Days on Market 17
List to Sale Ratio 0.008

NOTE: The list to sale ratio is the percentage of price paid in comparison
to the asking price of the home.


2006 DATA
List Sale List to Sale Ratio Average Days on Market
Qtr 1
LP $62,216,876
SP $ 59,953,563
LTSR 96.4%
DOM 126

Qtr 2
LP $125,923,217
SP$121,952,239
LTSR 96.8%
DOM 117

Qtr 3
LP $102,114,447
SP$ 99,176,435
LTSR 97.1%
DOM 105

Qtr 4
LP $ 58,032,298
SP $ 56,494,009
LTSR 97.3%
DOM 101

Year
LP $ 348,286,838
SP $ 337,576,246
LTSR 96.9%
DOM 112

2007 DATA

Qtr 1
LP $55,634,291
SP $54,005,266
LTSR 97.1%
DOM 121

Qtr 2
LP $115,093,124
SP $111,795,661
LTSR 97.1%
DOM 106

Qtr 3
LP $104,068,719
SP $100,906,407
LTSR 97.0%
DOM 103

Qtr 4
LP $62,924,828
SP $61,307,078
LTSR 97.4%
DOM 112
Year
LP $337,720,962
SP $328,014,512
LTSR 97.1%
DOM 111

DIFFERENCE 2006 vs. 2007

Qtr 1
LP $-6,582,585
SP $-5,948,197
LTSR .7%
DOM -6

Qtr 2
LP $-10,830,093
SP $-10,156,578
LTSR .3%
DOM -10

Qtr 3
LP $1,954,272
SP $1,729,972
LTSR -.2%
DOM -2

Qtr 4
LP $4,892,530
SP $-4,813,069
LTSR .1%
DOM 11

Year
LP $-10,565,876
SP $-9,561,734
LTSR .2%
DOM -2


And there you have it. Sales volume ended a little lower last year from 2006 but the percentage of price paid compared to asking price was up by 2% and the days on the market was down by a couple of days overall.

The absolutely encouraging and exciting news is that December of 2007 was better than December of 2006 and now January of 2008 was better than January of 2007.

These numbers certainly do not reflect the national gloom and doom stories we hear about every day. The bottom line is that college towns have a lot to offer as the future vision of retirement does not look like 5:00 early bird specials on dinner and fishing off the pier all day. It looks more like nightlife, theater, golf, culture, arts, music, ballgames and much more. It also required good medical facilities and physicians. It also requires great places to eat nice evening meals out on the town! What meets all of these criteria? COLLEGE TOWNS! We win!!!

We have it all and then some. We also have needs for housing for undergraduate rentals, graduate and doctoral first time home buyers, educators, medical service providers, international students and so many more diverse cross sections of potential home buyers.

What does this mean? It means that with the somewhat flat year in 2007 and the upward trend we see from December sales to current sales and the low interest rates this is a prime time to buy. As a matter of fact over the past decade, there has never been a better time to buy real estate. Don't miss it.

NAR 2007 Profile of Home Buyer & Sellers

INDIANA REPORT FOR YEAR END 2007

Survey results and profiles are provided by the National Association of Realtors

The median household income of home buyers was $62,800.

The median age of home buyers was 40 years old.

Among first-time buyers, the median age was 29.

Of the home buyer surveyed:

63% were married couples
18% were single females
9% were single males
8% were unmarried couples
59% reported that there were no children under age 18 residing in the home
5% were born outside the U.S. compared to 9% nationally
36% were first time home buyers
48% of those were between 25 an 34 years old
30% reported using web sites such as MySpace, Facebook, Linkedin, and Friendster
Of these the Buyers between 18 to 24, 73% reported using social networking
19% bought new construction

The median price of homes purchased in 2007 in Indiana was $135,000 in U.S. $215,000

Fed cuts give strapped homeowners more breathing room

Fed cuts give strapped homeowners more breathing room...

This is a headline from the following link. Interesting story.

http://www.marketwatch.com/news/story/fed-cuts-give-strapped-homeowners/story

Foreclosure...For Real!

Locked Out was the headline in the Tuesday, January 15, 2008 edition of the H-T.

The subtitle says “While Hoosier foreclosures climb to second in the nation, Monroe County bucks trend”

This article discusses how our local home owners are “escaping foreclosure by the skin of their teeth” which is true in many cases. We are seeing people avoiding foreclosure but that does not necessarily mean that they are keeping their homes. While the numbers are not readily available, it would be interesting to see how many mortgage companies are accepting a deed in lieu of foreclosure.

If you are unfamiliar with this language, let me explain. When foreclosure is eminent a lender will often negotiate with a home owner for the home owner to sign over the deed to the home to the lender, who in exchange will not proceed with the foreclosure suit seeking a judgment against the home owner.

Over the past year I have sat with many people who need to sell their homes because they can’t make the payments. In most cases they are already behind, they have little to no equity in the home and while they are with me they learn that they can’t sell their home because they owe more on it than what it will bring. They can choose to stay put until the courts tell them otherwise or end the attorney costs and sign the deed over to the bank without a fight. While the foreclosure numbers show that we are ‘bucking the trend’ I have to wonder how true that is. I believe if we knew the rest of the story we might have a less optimistic report.

What's Hot in 2008!

It's here... Just what you have been waiting for!

The 2008 – What’s Hot List!

For all of you who flipped when I put granite countertops on the What's Not list, you can relax. Just because it isn't hot doesn't mean it is out - it means it is just something that is normal and expected these days. There are new surfaces but granite has become a classic finish that may never really go out of style.

Now, onward to 2008.

High Tech is where it's at. Hot items you might find are:

• Automation is Big...Appliances, lights, automated blinds, audio & video systems that can be controlled from the internet or your cell phone and sensor operated faucets.
• Flat Screen & Plasma TVs mounted on the wall.
• Mulitzoned Heating & Cooling.
• Home audio & video systems in multiple rooms.
• Home Networks & WIFI.
• Nooks off kitchens and bedrooms to hold gear.
• Home Offices with acoustic privacy, better natural lighting, even separate entry for clients.
• Special function rooms such as media rooms or home theaters, fitness rooms, kids or guest wings.
• Green Home designs with energy efficient products like tankless water heaters, geothermal heating & cooling systems, structural insulation panels, flooring products made of bamboo and cork.
• Libraries and quiet rooms, parlors and music rooms.
• Kitchens that offer counters where people can visit with the cook, they will be high-tech with flat screen computers and TVs mounted to walls. The kitchen is now the social hub.
• Illumination is taking on major interest and innovative designs are all the rage. Recessed lights, below cabinet lights with bulbs on dimmers, lights on top of cabinets for indirect illumination, and because of energy efficiency, fluorescent lights are also becoming increasingly popular.
• Bedrooms & bathrooms are growing. Master suite's featuring a breakfast bar with mini-fridge & coffee maker, a sitting area & workspace alcove with flat screen & fireplace, a bath with his/her sinks, toilets & closets, a spacious shower & bath with a flat screen. The bedroom suite becomes a separate & private living space.
• Backyards with outdoor kitchens, built-in granite countertops, grills & fireplaces. This will be a must for upscale homes in the coming years.
• Neighborhoods with walking trails, parks & recreational elements.
• 3 Car garages and then some.

What's Not

• Formal living rooms.
• Carpet in the common living areas.
• Dial up, cables & cords.
• Homes that are 5000+ sq. ft.
• Stainless steel appliances & granite counter tops in the kitchen - expected, classic but not necessarily HOT.
• Small master suites, small closets, small pantries.
• Homes with little flow, closed off spaces, floor plans that are not open and spacious in the common gathering areas.
• Cookie cutter neighborhoods with big vinyl boxes.
• Two car garages.
• Draperies & curtains & window dressings. Clutter, fluff & fru fru. Over decorating.

This year I took a look at what is to come. It has been interesting to learn more about the up and coming generations. Throughout the year I will continue to post more on this subject as I find it fascinating. Here are a few things that you will find helpful and interesting:

The tail end of the baby boomers, the 40 and 50 somethings thinking of their future are looking to homes with:

• spaces for the off to college kids to come home to
• living spaces for aging parent's who may need care
• master suites on the main level
• smaller lots with less groundskeeping
• large and upscale paired patio style condominium living with wooded views or greenspaces & golf courses
• communities with a night life - no more 5:00 early bird special dinners for this crowd

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With home buyers ranging from Gen Ys to Boomers, the preferences greatly vary, however one thing is attractive to both buyers, less home to take care of, pay taxes on, pay utilities on, eat up environmental resources, whatever the motive behind it the mutually inclusive features of a home desired by both generations are:

• Average home size of 2300 SF.
• Living rooms will vanish.
• Upscale homes will average 4000 SF.
• Home offices are a must. A study by CoreNet Global’s Applied Research Center finds that more than half of all employers surveyed say at lase 10 percent of their workforce works remotely, a 3 percent increase since 2007.
  

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Generation Y (those born between 1981 and 1999) are having a greater impact on our housing market and that impact will continue to grow. According to The Urban Land Institute (ULI), this generation is very different from their baby boomer parents, who sought to achieve homeownership as soon as they reached adulthood. Gen Y is more likely to wait. ULI reports that homeownershiop rates among those age 25 to 29 have risen but they are uncertain if the trend will continue.

Generation Y’s housing preferences include:

• urban locations
• designs with open spaces and ample lighting, plenty of glass
• culturally and ethnically diverse neighborhoods
• communal gathering space
• wireless access
• energy-saving features and eco-friendly finishes
• small yards, little exterior maintenance
• high tech & automation

More interesting facts on what our nation is shaping up to look like:

Forty percent of US households will be headed by someone 55 or older by 1012 and the over 55 population will reach 85 million by 2014 –NAHB report 50+ Housing Council.
The number of households in the 65-74 age bracket will grow by 4.5 million between 2005 and 2014, a 38% increase.

Boomers don’t need to move, they’ll change homes when their lifestyles change.

Hispanic Market growing strong…
“The Hispanic population grew by 3.3 percent between July 2004 and July 2005, , making it the fastest growing minority population in the country. Between 2007 and 2012, that population is projected to grow by 16.3 percent while overall population will grow by a mere 5 percent. Dr. Oscar Gonzales, director of the Gonzales Group in Houston , CRS Marketing to the Hispanic Consumer.”

39% of the current Hispanic population is under the age of 18, which means that many will be looking to purchase their first home within five to 10 years. The impact on the real estate industry is significant, says Gonzales. Hispanics usually rent for a few years but decide to buy because they need a larger home for their extended families, often made up of two or three generations.

Mortgage Fraud ... What is it?

ONLY IN INDIANA???

When you wonder why our foreclosure numbers are so high and why so many mortgage funding companies are having trouble these days you will now remember this story and have your answers. As reported in the Real Life section of the January 2008 issue of Realtor Magazine:

Headline: Scamming the Mortgage Scammer

Mortgage fraud has become all too prevalent in some areas as buyers and sellers struggle with a volatile financial market. But you know things are getting surreal when one party to a fraud scheme is scammed by another – and then tries to sue and recover damages.

Fortunately the 8th U.S. Circuit Court of Appeals put a stop to that. In the case, Michael Stapleton proposed to Trent Decatur that Stapleton would locate undervalued houses, which he would arrange to have appraised at twice their value. Decatur in turn would borrow an inflated amount from a mortgage broker who was part of the scheme. Decatur was supposed to receive rent from the properties while Stapleton used the extra funds to renovate and find tenants. Instead, Stapleton and the appraiser split most of the money left after purchasing the house and stopped paying Decatur rent after a few months. Decatur sued them for fraud and negligence.

After a trial court dismissed the case, Decatur appealed, claiming that Stapleton and the mortgage broker were his agents. This, said the court, was “loopy.” It also rejected Decatur’s claim that the appraiser was guilty of negligence since Indiana law states that a professional cannot be liable for information provided indirectly to a third party (in this case, the bank). Just proves you can scam a scammer.

By Mariwyn Evans

AVENUES thanks Mariwyn for publishing this ridiculous circumstance. It just goes to show you how these people think. They have no clue that they are doing something illegal. Perhaps because the same court that dismissed the case did not notify the authorities of the blatant fraud that was not only admitted but well documented by the person who comitted the crime. Come on, can we enforce the law on these things???