As we approach the dawn of a New Year, a VERY important one for these United States, I have a few simple wishes.  Of course, the devil is in the details.

First and foremost, let's drop the "hyphens" and the mention of R, D or I (even L) and start ACTING like we are truly "one nation" ("under God" would be great but let's take baby steps!) INSTEAD of behaving like uneducated masses who haven't eaten in days provided access to a buffet where we push and shove and grab what WE want for ourselves.  The United States was created to be and has always been designed to be a free, sovereign nation where citizens are expected to conduct themselves responsibly, which includes taking care of the truly less fortunate.  We have, sadly, become a land where too many do too little and expect others to provide for them.  We should be a land of equal opportunity but have been bent towards being one of equal outcome.  Niche marketing has a place in the business world but we have become too splintered as a nation, fighting amongst ourselves rather than working together.  United we stand; divided we fall.  Let's just be AMERICANS!

Second, let's enforce our laws fairly across the board.  Our Constitution is an excellent foundation.  While we may argue about what our forefathers meant, we have three branches of government that were established with specific responsibilities as far as addressing any discussion about changing or adding to our laws.  Let's make these branches operate as intended (for example, judges and the executive branch should NOT make law!).  Where appropriate, let's remove archaic laws from our books, reduce duplication and end those with unintended consequenses.  I respectfully submit that we have both the right and the need to expect that our citizens be able to prove that they belong here and are eligible to vote.  Enforcing our laws would protect us by protecting our borders from those who would do us harm (stealing our resources has progressed to the point of doing this nation harm) and provide a level of accountability sadly missing in many instances.  Anyone entrusted with enforcing our laws who fails to do so should be held accountable!

Third, let us re-evaluate our elected leadership and hold them accountable for results.  Average citizens are accountable, aren't we?  I expect leaders, especially those who seek our support in electing them, to be people that we can and should respect and want to emulate but, too often, I find them sadly lacking in many of the areas that I would require of any employee of mine.  I do not have to like them or look like them but, if I am going to entrust my present and my future to them, I think I have the RIGHT to expect a certain commitment to a shared vision of this country and where we are going.  I am tired of the rhetoric, lies, placing blame and making excuses.  They have failed us.  Can they do the JOB?  Are they willing to do the JOB?  Our leaders MUST be held to the same standards that we are.  They have become a "ruling class" given special privileges and special consideration.  So much so that they will do ANYTHING to cling to power.  We need term limits!  Unfortunately, too many of us are too easily fooled by these well-educated smooth talkers and we continue to let them ruin the very fabric of our society while they prosper at our collective expense.  We have an inter-connected world with many hostile people who have access to the deadliest weapons and we need to be united in our efforts to sustain our way of life.  Isolation is not an option.  There are too many examples throughout the world of where we may be heading.  Fool us once, shame on you; fool us TWICE, shame on US!

Those of you with children and grandchildren probably already look decades out to imagine what they will face.  They are already burdened with our excessive and inexplicable national debt but our way of life is even more precious.  Their futures start with but a single step and we have taken too many steps in the wrong direction.  There is time to "right the ship" but time is precious and wasted time is never recovered.

We all have challenges.  My wish is that we each take some time to really think about the big picture.  For some, especially those out of work or wondering where the next meal is coming from, the future is today.  It starts today but what of tomorrow and the day after that?

Happy New Year.  Let's make it better than what we have seen in a long time.

Thank you for reading!

Andrew Wetzel

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The Real Estate market today offers a rare blend of three factors that should kick start the housing market ("demand") but it hasn't.  The factors are historically low interest rates, favorable prices and a wide range of choices (meaning higher than usual inventory levels or "supply").  Let's look at each separately.

"Low interest rates" is a relative term.  Younger prospective buyers have come to expect them.  Others may be waiting for even lower rates but, frankly, as I recenty blogged, the difference in monthly payment for a full percent change in rates is NOT what you would think.  If you buy now and rates fall, you can refinance.  What happens when rates rise (this is going to happen sooner or later, isn't it)?  You cannot time the market.  We only recognize trends in the "rear view mirror".  Rates are being kept artificially low which means they should be higher and that spells opportunity.

"Favorable prices".  Again, you may be used to these and even be waiting for them to fall farther.  I have heard a number of times that we have "hit the bottom".  Have we?  Real Estate is "local" so it depends!  One thing I would stress is that prices are "elastic", meaning that they are inversely related to interest rates.  On the other hand, a large supply of houses will generally depress prices so, apparently, it is the high inventory level (among other things) that is causing the housing market to continue to "under perform" despite low interest rates.  Picture a "see saw" with prices on one end and interest rates on the other.  Generally speaking, one is up and the other down.  It does not matter which is which but having favorable prices and low interest rates is quite unusual.  Before the "housing boom" there was a period where interest rates fell and prices remained stable.  However, as buyers seized the opportunity, demand and competition forced prices to rise to unsustainable levels ("irrational exuberance".  People who waited missed out!  At some point prices overall will rise again.  In some areas houses still sell quickly, there is competition (multiple offers) and some sellers are getting more than asking price.

"High inventory levels/ supply".  This is the "wild card" in my opinion.  First and foremost, it is a moving target (houses come on the market and they come off; houses go under contract and deals fall apart).  The "elephant in the room" is the so-called "shadow inventory".  Who know how many houses are waiting to be sold?  There seem to be more entering that limbo phase although the rate seems to be declining.  The fallacy is that these homes are generally NOT what the typical buyer is looking for and, it is my opinion, that they should not be having an effect on pricing OR appraisals in most markets.  Obviously if they proliferate in any area they will.  You would think that prospective buyers would welcome the number of choices they have to consider buying.  I have been a Realtor since 1996 and I have never seen buyers have so many choices and MANY of them show very, very nicely!  I think that some buyers are overwhelmed (paralysis by analysis) and may either have trouble deciding what to buy or are waiting for something nicer to come along.

This is truly a rare time in Real Estate!  Many buyers are taking advantage of these factors and seizing the moment.  Others are not!  Why not?  I will offer my thoughts on that next time.

Thank you as always for reading!

Andrew Wetzel

Many have written how the under-performing housing market is hurting the overall economy (and, conversely, how the under-performing economy is hurting the housing market).  I read a number of articles over the weekend that specifically discussed the impact on small business.  It was an "a-ha" moment for me but probably overlooked by many.

Hopefully most of us believe that "small business" is the present and future of this economy.  The days of having one job throughout your lifetime ending with a gold watch and pension are gone for many of us though it remains a dream for some.  There are no such guarantees and, frankly, most of those jobs went overseas.

The debate over small business has included arguments about excessive regulation and over-taxation of individuals.  Here is another one:  many small business start with an infusion of money from the equity in private property/ homes.  In "normal" times this is not so risky as values rose.  Today, if you can get an equity loan, it is much more risky and, even worse, if an entrepreneur cannot tap into their equity they simply cannot start, maintain or grow their business.

I am not sure what the average citizen can do but I encourage everyone to look beyond the posturing that both parties are doing and (a) think about your own situation and what would make you "better off" and (b) think about what would help others you know or even don't know.

The answers don't involve much of the sound-bites we hear today and, at the end of the day, we elect/ hire representatives to SOLVE our nation's problems (and I would add that we compensate them VERY WELL).  It is time to hold them accountable.  I am tired of everyone blaming someone else.  Lead or step aside. 

Thank you for reading.

Happy Thanksgiving to all!

Andrew Wetzel

They say that "hindsight is 20/20".  I never knew who "they" were but they have said many things that turned out to be true!  Looking back, the last few years in Real Estate should have been predictable.  Shouldn't someone have been wondering where the road was leading???  Instead, we lived in the moment and thought the party would never end (those were the days my friend ...).  We were so wrong!

I started in Real Estate in 1996 and in the early years of the last decade I began feeling that something was different.  In retrospect, there were 3 "significant" points that, while seemingly related, should have clearly signaled the last few years.

Here is what I saw:

1. interest rates fell fairly rapidly over a couple of years (see the above chart.  Looking closer, at the month-to-month history, it does not seem that dramatic).  This was done intentionally to stimulate a lagging economy but, arguably, it went too long and went too far.  During this period the typical buyer benefitted the most:  they were able to buy existing inventory at ever-increasing bargain interest rates and many who bought were able to re-finance, some did so again and again!  The good news;  many jumped off the fence and "got in the game".  My "niche" has always been listing sides, specifically "expired listings" (these are the ones that other agents were unable to sell for whatever reason).  During this time many "hard-to-sell" listings sold.  The bad news was ...
2. it took a little while but low interest rates led to competition, often intense and "cut-throat".  Houses sold fast (buyers did not overlook ones they felt were "over-priced" as they do today), many received multiple offers and many went for over the asking price (try doing that today)!  Agents and buyers became fatigued:  instead of making 5 calls to schedule 5 houses to show and knowing that a buyer could visit a house they liked again and take a couple of days to decide whether to make an offer, it could take 15 calls to see 5 (meaning that houses were selling faster than their listing agents changed their "status" in the MLS and other sales were being negotiated while you were actually at an appointment).  A serious buyer had to plan on writing an offfer right after a showing,  frequently stopping in the middle of a tour, canceling some appointments and proceeding to your office without passing GO and without collecting $200!  The good news was that many sellers got amazing amounts for their houses (in any condition).  The bad news was that (a) buyers ended up with the same monthly payment they would have had at higher interest rates with lower selling prices (with less chance to re-finance the rate!) and (b) no one expected values to hit a wall and then decline which left many in a predicament.  You could be "underwater" and owe more than the market value OR you could be over-leveraged and locked in.
3. this is where we sold our soul and the problem went global.  The first two points are somewhat "natural" forces, admittedly somewhat extreme, but this one is the one where reason went out the window and laws were broken:  mortgage financing became almost as easy as breathing and that really started us down our present path.

In Part 2 I will offer some specifics that I experienced.  Hopefully we will soon get past this and learn from it.  Otherwise, we will be doomed to repeat this.

Thank you for reading!

Andrew

Andrew Wetzel, MBA

Associate Broker/ Mediator

ABR/ CSP/ e-PRO/ GRI/ SRS/ REALTOR

Seller and Buyer Agent Licensed in PA. (AB066640)

Century 21 ALLIANCE

1100 West Chester Pike

Havertown, PA　 19083

Office:　 610.853.2700 x604/ DIRECT:　 610.853.5604

Cell:　 610.457.0831

andrew@AndrewWetzel.com

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Pricing.pdf (130 KB)

I am including 2 scans (use the scroll bar to see the second one).  One is about "price adjustments" that I discuss with prospective and current sellers; the other is a humorous look at how different people view the same piece of Real Estate (sadly, there is some merit!).

I recently completed a 3-part blog on CMA's (competitive market analyses) so the next step is to explore pricing a piece of Real Estate.  Taking into account what a seller owes and what they need to realize from a sale, sellers need to compare those factors with the market and "position" their property so that it will attract attention both on the Internet AND in terms of actual showings.  Pricing and marketing are the topt two reasons that houses do NOT sell!  Many listings get a high number of "hits" with few or no actual showing appointments.  Your price, absent any change to it or to the market, will go a long way to determine whether you will sell your property or continue to own it.  A properly priced property may be as good as sold from the start.

In general, your price has to make your property competitive with others that share the same features and condition and whether you price it based on the "actives" OR the "solds" will depend on the type of market that you are selling in.  The Internet is the "game changer" as fas as we need to look at pricing and marketing.  By that I mean that many Internet sites offer "drop down" boxes for prospective buyers to use to narrow and focus their searches.  You need to know where you need to be to get your property looked at.  The MLS may allow you to pick any price BUT over 90% of buyers "shop" online to start their search and if you are not where they are looking, you may miss opportunities to sell.

In addition, if you are on the market and either NOT getting showings or NOT getting inquiries/ offers, you need to decide "how" to effectively "adjust" your price.  Do you want to "get lower" for prospects who have you in their search results but have not decided to look yet OR do you need to "re-position" your property so that a different group of prospective buyers can see it in their results?  Knowing your "bottom line" will help you decide which approach to take.  You also need to know what the market is doing so that you will know whether time is on your side or not.

Thank you for reading!

Andrew 

Andrew Wetzel, MBA

Associate Broker/ Mediator

ABR/ CSP/ e-PRO/ GRI/ SRS/ REALTOR

Seller and Buyer Agent Licensed in PA. (AB066640)

Century 21 ALLIANCE

Office:　 610.853.2700 x604/ DIRECT:　 610.853.5604

Cell:　 610.457.0831

andrew@AndrewWetzel.com

Visit www.AndrewWetzel.com  to view properties!

Regardless of your political "persuasion", aren't you alarmed by some of what you hear about our elected officials?  Perhaps you have been desensitized and are no longer surprised by it.  I believe that if we held them to the same standards to which we hold Realtors, we would be much better off and could restore the faith in government that many of us are lacking.

Please note that a Realtor is a licensed Real Estate agent who is a member of the National Association of Realtors (NAR).  As such, Realtors have and are EXPECTED to follow a Code of Ethics which defines how we should conduct ourselves.  Actions are either "ethical" or "unethical" (much of what differentiates them has to do with motive, intent and tranparency rather than outcome).  The word "professional" is different and has more to do with how our actions appear to others.  Many confuse these words:  you can be unprofessional without being unethical but I consider being unethical the same as being unprofessional.

How would you like our elected officials to be required and expected to comply with the following:

• protect and promote the interests of their constituents and to treat all parties honestly
• avoid misrepresentation or concealment of pertinent facts and to refrain from advising on matters outside the scope of their training/ expertise
• cooperate with others when it is in their constituents' best interests
• make their true interests known when involved in financial transactions
• they shall not personally profit through their efforts on behalf of their constituents without the constituents' knowledge and consent
• keep monies that come into their possession separate from their own funds
• provide services to their constituents which conform to a standard of competence which is reasonably expected for their position
• officials shall not knowingly or recklessly make false or misleading statements about their competitors

These standards would elevate the integrity/ performance of many of them.  The time has come!  Thank you for reading.

Andrew

To view Part 1 (an overview of the process), please click the link:

http://andrewwetzel.posterous.com/what-is-a-cma-part-1

To view Part 2 (an explanation of the forms), please click the link:

http://andrewwetzel.posterous.com/what-is-a-cma-part-2-an-explanation-of-the-fo

Let's imagine that you are a buyer or seller, you have a CMA (as found in Part 2) done by a Realtor and you are wondering what it means and how to utilize the information.  I will discuss this from each perspective.

As a seller, in general, please keep two things in mind.  One is that buyers will have access to this same information so they will see other properties that "match" yours in terms of features and condition (and know what they are "asking") AND they will see what other similarly priced properties have to offer.  There is little left to the imagination these days other than what you want to sell your property for and what a buyer may think about offering you.  The other thing to remember, assuming that the buyer will finance the sale, is that the lender's appraiser will also have access to this information.  While not impossible, it is much harder to sell for a price higher than what has already happened and, like the buyer, the appraiser is looking at the cold hard facts and probably not thinking about your reasons for selling or what you need to accomplish.

The CMA can be "drilled down" as far as you want so that you can feel more comfortable deciding whether to accept, "counter" or reject an offer.  It is not a science:  in "multiple offer" scenarios, unless the asking price is reasonable and you get a number of "full price" offers, you will get different offers.  The trick is digesting different dollar amounts, financial qualifications, contingencies and other "objective" aspects of an offer.  Respond to the facts NOT whether you think you like the buyer (and geez, aren't their kids so cute?):  this is BUSINESS.  That being said, your circumstances (why you are selling, how much you owe, what you need for your move, etc.) will affect the negotiating and you need to involve your agent so that you can start with a reasonable asking price, respond to what the market does or doesn't tell you (there is a method to a price reduction) and maximize any negotiating to keep the deal together.

As a buyer the scenario is as involved but you are on the other side of the coin.  As I have written before, buying should start with a clear picture of your finances:  what will a reputable lender loan you AND, as important, what are you COMFORTABLE paying each month?  Iit is very frustrating when a buyer gets "cold feet" about the monthly payment.  You also really need to think about what you want to buy (in addition to price, carefully consider location, features and what "condition" you are willing and able to accept.  One scenario I like to discuss is whether a buyer prefers an average house in a great neighborhood (however you define that.  It should "appreciate" through your effort) OR the best house in an average neighborhood (you may need to hold onto this one longer to get your investment back).

Once you identify the one you want to buy, the CMA will give you some guidance but an offer is a personal decision and no two buyers may place the same value on a home.  Assuming that an offer will appraise, it comes down to how much you want the house and whether the seller stays interested in whatever you do to obtain it.  In my experience, women tend to be more practical as buyers and sellers while men tend to thrive on "getting a deal".  How much you offer and how you negotiate will depend on your personality and life experience as much as anything but do keep in mind that, even if it is a short sale or foreclosure and you are offering cash, there is someone on the other end who has needs as well.  In my last blog about interest rates I clearly pointed out that bumping up a purchase price, either to get a more desirable location or set of features or to close a deal does NOT have to bump up your monthly payment that much.  I truly believe that a home is "something you grow into" and should NOT be something that you quickly "outgrow".  Even though owning makes much more sense for some people than renting, closing costs take time to recover.

As with anything "Real Estate", much of what you do comes down to proper planning, clear thinking and hiring wisely!

Thank you for reading.

Andrew