This link will take you to Part 2, which begins with a link to Part 1:

http://andrewwetzel.posterous.com/108542520

In part 2, I concluded my post with the following statement:  "So, why a mixed blessing?  Both blessings are accompanied by a loss of control and therein lies the rub!".

Loss of control?  For me, trying to control buyers and sellers is like herding cats.  The expression that comes to mind is usually associated with romance but it applies.  I am not sure who created it and I am going to paraphrase it:  if you love someone, set them free.  If they return, they are yours.  If not, they never were.

As far as working with buyers and sellers, you have either earned their trust and respect ("shown value") or you have not.  Realtors are required to "present" the Consumer Notice during the first "substantive" discussion about Real Estate.  If done as intended, this will ensure that our prospective clients understand the "menu" of services available to them and let them know that a formal business relationship needs to be put into writing by having both parties sign a representation contract.  Generally speaking, when I have been involved in discussions involving Realtors who were upset that their "client" accepted Real Estate services from another agent, they had failed to provide the "Consumer Notice" and not entered into a mutually binding written representation agreement.  Yes, I did say "mutually binding":  if we expect to be compensated when a member of the public buys or sells Real Estate let's not forget that they expect us to "perform".

Let's discuss buyers first since "Buyer Agency" is still in it's relative infancy compared to "Seller Agency" (how many sellers are "represented" without a formal contract?).  Many prospective buyers have already spoken to several agents and even seen a number of houses before they "hire" their eventual agent.  Even after they have signed the paperwork, buyers WILL still go online to "shop", see information posted by your competition, see "For Sale" signs, visit open houses and, heaven forbid, make a call or send an email inquiring about a property that you, their "Agent", may not even know about.  Hopefully when you agree to represent a buyer you have explained the process and your mutual responsibilities.  That being said, mistakes occur, even honest ones.  While the Internet can be very helpful, a wise agent needs to know that it offers temptation and could compromise an otherwise healthy relationship.  Even in the best of situations, the Internet has a lot of bad information.  Know it, love it and learn how to use it to maximize your buyer agency relationships.  Respecting the relationships that other agents have with members of the public is part of the equation as well.

For sellers, the problems are different.  If you have a listing contract there is practically no chance that another agent will post their signage on your client's lawn and there are rules preventing agents from contacting your client but there are "loopholes" so know them!  Your seller client can still go online and see the same things a prospective buyer may see and you have to be prepared for discussions resulting from that exposure to other agents and how they market or talk about marketing their properties.  The blinders are off!

In general, the ease of accessing information has changed our roles with both sellers and buyers.  We still have a vital role in the process and need to be in "the center" of the transaction.  We may not "meet" our prospective clients at "ground level" or when they start their search for information.  In fact, many wait as long as possible before contacting an agent or hiring one.  Most of my clients come to me with a broader perspective and more questions than in years past.  While some of their assumptions are based on faulty information, my typical client is better informed than before so our discussions are more meaningful.  An agent cannot be intimidated by the Internet Empowered Consumer and must accept and understand that if they do not provide clear and timely information to their clients, they will find it elsewhere.  Good agents are shown to be good by this comparison.  The converse is also true:  you can't "fake it until you make it" as the old mantra goes and that is a good thing.  Be honest.  Know what you know and learn what you don't.  Embrace our changing role and understand it.  There is no alternative:  the "gatekeeper" days are gone!

Thank you for reading.

Andrew Wetzel

Century 21 ALLIANCE

If you missed Part 1, please click on the link:

http://andrewwetzel.posterous.com/how-to-be-a-serious-buyer-part-1

So, you have been pre-qualified by a reputable lender and determined how much money you want to spend on your house each month.  Congratulations!  That is fantastic!!!  This step alone will place you well above "most" buyers.  Not only are you ready to begin deciding what to search for BUT you are in a position to have a Seller know that you are SERIOUS when you make an offer on their house!  It should also give you some much needed "peace of mind" as compared to worrying about the financing after finding a house you really like.

Now comes the part that separates the SERIOUS Buyer from the "lookers".  You need to determine the three key ingredients to any house search:  #1 is "where do you want to live" (LOCATION); #2 is what are the "must-have features" (also called "non-negotiable"); #3 is what are the "nice to have" features (in pricier areas you may have to swap these for location.  Keep in mind that you can always "improve" the house BUT the neighborhood/ location will NOT change!).

If you talk to any of my buyer-clients they will tell you that I preach that "you are buying the neighborhood";  that is the major reason why market values vary especially when comparing two very similar houses.  Some say you are buying a "lifestyle".  Whether you plan to stay a short period of time OR plan to make every mortgage payment until there is no balance, the location will do more to affect your lifestyle and "resale value" than anything else so this decision needs a great deal of attention.  There are no short cuts.

Some Buyers know the area and have a very clear idea of where they want to live (many will focus on the school district).  This is great but now is the time to explore a little to see if you might be overlooking a great town somewhere else.  I like to use a map to do my research.  Here is how it works:  you decide what "points of interest" must be considered as far as travel (for example:  where you work, where relatives and friends live, etc) and then you have to decide how far you are willing to drive on a regular basis.  The map will have a "legend" that tells you how many "inches" are in a mile.  Suppose an "inch = 5 miles" and you determine that you are generally willing to travel 15 miles to work.  You can "plot" the areas may want to consider on the map by drawing a circle (with your job or any "point of interest" in the center) with an 3" radius.  Anything "inside the circle" may be a town to consider.  Obviously this gets more complicated as you add multiple "points of interest".  Different roads provide different rates of travel.  The bottom line is that, however you do it, you need to prioritize the list of areas that you will consider.

There are numerous other ways to create your list.  I only suggest that you take the time to get the list "right for you" as soon as possible and that you do so with an open mind.  There are many absolutely fabulous places to live that many will never experience!

Poor planning will waste your time.  Some buyers find houses they like but they can't seem to commit to the location; others seem to keep adding or changing areas.  You can live anywhere you want and this is a REALLY serious part of any search so please take the time and effort to determine location(s) before doing any other work.  This is especially true if you are moving a distance or to an area you know very little about.  Marriage and employment frequently make such a move necessary.

Next time:  features.  This can be really fun.  It is almost like building a house.

Thank you again for reading!

Andrew Wetzel

Century 21 ALLIANCE

Normal 0 false false false MicrosoftInternetExplorer4

Let me start with a simple question.  When you decide to make a "significant" purchase, what type of process do you use?  Do you start looking at everything that MIGHT be what you think you are looking for?  Do you look without considering important features?  Do you look without thinking about how much you want to spend?  Do you jump into the process without considering where to look?  Hopefully the answer to each of these "basic" questions is NO!  Sure, "shopping" can be fun and everyone likes to "browse" now and then but that is NOT how to buy a house!

Obviously for low-cost, frequent purchases (meals, compact discs, books, etc.) you probably don't need to do a lot of planning although you will probably want to make sure that you have cash or a credit card before you leave home.

However, for purchases where you will need to make a significant investment in both time and money and where you will own what you buy for a number of years, you should probably have a "plan".  You know what they say:  if you fail to plan, you should plan to fail!

Buying a house to live in (as opposed to an investment or a commercial property) is a significant purchase that involves a lot of money, a great deal of "subjectivity" and it is a purchase you will probably own for quite awhile.  Mistakes are costly and time consuming!

There are countless books and opinions on what to do to undertake this very serious "project".  Here is my opinion.

First, talk to a reputable lender and get "pre-qualified".  No this isn't much fun but you need to know what they will loan you before you start looking at houses.  Even if you do not want to borrow the maximum amount, you MUST know a dollar amount to start an intelligent house search (many buyers "qualify" for less of a loan amount than they expect.  Forget the online "mortgage calculators!).  Most sellers will want some proof of your financial ability BEFORE responding to any purchase offer you make!  Unfortunately, many buyers talk to a lender after they find something they like only to find that they cannot obtain the necessary loan amount or, equally frustrating, they can get a loan BUT they find that someone else got the house they wanted.  I have to wonder what their REALTOR was thinking!  What a waste of everyone's time.  An agent who does not insist on your doing this before they show you houses is probably so happy to have a "live" client that they fear finding out what they probably suspect anyway.  Both of you should run away from each other as fast as you can!

Second, this is the time consuming part.  Many buyers start looking at houses and hope this part of the process will "evolve" for them.  The fact is that you need to know what type of house you want (single/ twin/ row), what features it has to have (keep the "wish list" realistic:  the more "must haves" you mention, the smaller the selection) and where you want to live.  Many buyers do NOT realize that REALTORS are NOT allowed to "steer" you.  We are allowed to discuss houses.  You can live anywhere you want and want any features you like but please do not ask us for "nice neighborhoods" where you will "feel safe",  The choice of location is yours and is a significant part of the equation (purchase price will determine the "mix" of location, type of house and features).  That research is something you must do and what you feel is "nice" or "safe" may be completely different from what a REALTOR thinks those words mean.  I suggest that you focus on school districts or municipalities rather than "postal delivery codes" and try to get the list down to a few areas.  Once you see the options that you have based on price, features and location, drive into the local neighborhoods and start to really narrow the focus.  My typical buyer may actually only visit 10-12 houses while eliminating many more by driving by them or seeing them online.  Having 100 possible houses to consider really means that you don't know what you want or are too vague on some details.

Serious buyers do not turn showing appointments into shopping tours.  A REALTOR's time is as valuable as yours so please help us plan ahead so you will be in the best possible position to find your "dream house" before someone else does.  All REALTORS and their buyer-clients have access to the same multiple listing service information.  The real point of differentiation in a serious house search is in the planning.  The early bird gets there first!

Next time:  more on managing your "must haves" and how to get the best house for you!

Thank you for reading.

Andrew Wetzel

Century 21 ALLIANCE

Source: Philadelphia Inquirer; 3/8/2012:  The Nutter administration could be collecting an additional $90 million in property taxes in 2012-13, but feels that it's not a tax hike. The new revenue would be collected as the city switches to a system that values property based on the actual market price for tax purposes.... Mayor Nutter argues that the switch to actual value merely will take into account the rise in overall property values since 2004, the last time any significant reassessment was done. (NOTE: I added emphasis to certain portions of this paragraph).

A few years ago a property reassessment was done in Delaware County. Space prevents me from outlining how assessed values became so inconsistent over the years. The reassessment was designed to re-apportion assessed values (meaning property taxes) more "fairly" within communities. The over-arching principle, however, was that it was a "zero-sum gain", meaning that the end result could and would not be to raise the total amount of property tax revenue collected. Home owners were allowed to appeal their new assessed value and were given the methodology for doing so. What many did not understand was that if my taxes went down $250, that revenue loss had to be made up somewhere else so reductions were difficult to obtain.

Mayor Nutter, while I agree that the city assessment platform is antiquated and prior attempts to "correct" it were political and arbitrary (remember the old "crony" system?), changing the way the city "assesses" value should NOT be used as a way to increase revenue. Increase fairness, yes! Make "assessed value" more realistic, yes! The fact is that you could arbitrarily take every parcel and increase the "assessed value" tenfold or somehow convert to "fair market value" but that should NOT mean that taxes would go up one single penny. The "millage" is where you account for rising value and budget concerns. Keep in mind, you already have an 8% sales tax, an earned income tax and plenty of other issues that raise concerns with some current residents and others who may be thinking about moving into the city, is this really the way to go? What a political ploy and yet another reason why the city of Philadelphia remains such a poor example of good governance.

I would welcome comments from Real Estate professionals who live and work in the "City of Brotherly Love".

Andrew Wetzel

Century 21 ALLIANCE

During my almost 16 years in Real Estate I have been asked many times to explain the process of buying a home.  I love analogies and tried to find one that most people could identify with.  The one that works for me and seems to make sense to my clients is that buying a home is like getting married.  Let me explain.

Somewhere a man has just noticed a woman for the first time.  Whether she was a friend that he hadn't met yet or was someone he already knew, he was at this very minute really looking into her eyes, seeing her smile or hearing her laugh.  The reaction was instantaneous and he decided to take action and ask her for, as archaic as it sounds, a "date".

On the other side of town a couple (it could be one person) has decided to buy a home.  Whether they are buying their "first" or their "next" does not matter.  They are discussing their choices and have found one that really seems to make the others pale in comparision.  They may have seen the outside before but something made them realize that it could really "match" what they are looking for so they decide to take action and schedule an appointment to walk through it.

The man and woman have spent quite a bit of time together and found that they really liked each other and had no interest in spending time with others so they decided to make a commitment and take the next step:  they become "engaged".

The couple decided that they really liked the house and had no interest in looking at others or waiting for the illusory "better one" to become available.  They decided to make a commitment and take the next step:  they decided to make an offer.  After a little negotiating, they agreed to a settlement date.

The now engaged man and woman told their friends, began making the necessary plans and hired professionals including those who would make their choice "official".  During this time, their focus was on each other and getting married; their plans unfolded without interference or interruption.

The house hunting couple told their friends, began making the necessary plans and hired professionals including those who would make their choice "official".  During this time, their focus was on each other and buying their next home; their plans unfolded without interference or interruption.

Both couples continued to learn about their choices and each other, faced some stressful times throughout the process AND remained committed to their goal.  One became husband and wife; the other became home owners.

Don't misunderstand.  I am NOT equating marriage with owning a home.  However, both require many of the same characteristics.  To extend the analogy, this is why I prefer that property showings stop once there is a "bona-fide" purchase offer in place.  While this is the seller's decision, I respectfully ask that they carefully consider their options and discuss this with their agent.  An engaged couple doesn't continue dating, do they?

Neither of these significant "life" events is guaranteed to last a life time and both require a concerted effort to achieve and to maintain.  They are NOT for everyone.  Success typically requires using professionals.

Thank you for reading.

Andrew Wetzel

Century 21 ALLIANCE

In my last Blog, http://andrewwetzel.posterous.com/death-of-the-gatekeeper-welcome-to-the-21st-c, I compared the evolving Real Estate buying and selling experience to the "traditional" sales model.  In my opinion, Real Estate agents became "gatekeepers" or human barriers between Real Estate information (prices, addresses, etc.) and an inquiring public.

In the "traditional" sales model, the sales person sought to get past the "human barrier" that separated them from a decision-maker who was in a position to buy what the sales person was selling.  The "traditional" sales person had a variety of options available for them to try to get past or through the gatekeeper.   In Real Estate, technology stepped in!  This was, in retrospect, a mixed blessing in some respects.

The rise of the Internet has forever changed our lives.  The world wide web has connected us 24/7 and opened the door to a tremendous array of information and services.  In some cases it rendered business models archaic or even useless.  For example, look at how many things you now do online.  Do you use many postage stamps these days?  Visit as many retail stores as you did a few years ago?  In others business models, such as those which are "people intensive", it shifted roles.  This is what happened with Real Estate.

For Realtors with property listings, the Internet provided us a cost-effective way to market our listings and our services to a much wider audience than possible before.  The role of the "traditional" tools has been greatly diminished (just look at newspaper advertising).  For example, over 90% of prospective buyers "shop" online for Real Estate, many before ever contacting and hiring an agent.  Sellers got better exposure for their properties but needed to come up with a different way to compare possible listing agents (smooth talking does not necessarily translate well online).

For Realtors with buyer clients, the Internet provided us a cost-effective way to "present" properties to our buyers  rather than driving mile after mile and visiting an endless number of houses (a seller's "first showing" takes place online today and most buyers use the Internet to eliminate most houses that appear in their "search results" from further consideration).

So, why a mixed blessing?  Both blessings are accompanied by a loss of control and therein lies the rub!

Thank you for reading!

Andrew Wetzel

Century 21 ALLIANCE

In the traditional "sales model" there was always a gatekeeper. These were the obstacles, I mean people, a salesperson needed to get past to actually meet or talk to a decision-maker. Whether it was a receptionist, an assistant or some "underling", if you could not smooth talk your way past them, you were SOL:  the decision-maker was "unavailable". Don't bother leaving a message!

In "traditional" Real Estate the agent became the gatekeeper:  they had "information" the public wanted and they controlled how it got out. Even today there is some question about who owns the data generated by Real Estate transactions. Conversations amounted to playing "tennis". Someone who called for information such as a price or a location was generally expected to provide information to the agent in return. Simply stated, agents are always "prospecting" for new clients and that endeavor may conflict with a caller who might have no intention of creating a business relationship or is just curious about a property. Unless both parties were able to help each other, the dialogue went back and forth until the caller got what they wanted or until either party simply gave up. I don't mean this to sound bad but it was a fact. Some remnants of this exist today even in Real Estate. Over time the "public" tired of "the game" as did agents but we feared loss of control.

Realtors are REQUIRED by our Code of Ethics to ask if a person is working with another agent. Agents also recognized that if they simply provided a direct answer that the conversation would be over quickly and that whatever money the company paid to generate the inquiry was gone. However, admittedly, the "back and forth" could get very frustrating. People learned to avoid it by saying they were working with an agent when they weren't or they hung up and called somewhere else or they employed any of the other numerous "moat building" techniques to place a wedge between themselves and the hapless Realtor who really just wanted to know how they could help. Maybe simply offering to help was the answer.

It is my opinion that the root of the problem comes down to whether we are "salespeople" or consultants (note:  only Brokers/ Associate Brokers are allowed to promote themselves as consultants or advisors but that does not prevent us from approaching our business that way). I do NOT consider myself a salesperson and, with all due respect to those who call themselves that, I am offended when called a salesperson because I believe that it minimizes what I believe my role in a Real Estate relationship/ transaction is. I have never talked a buyer or seller into doing anything that they did not want to do and on several occasions have questioned what they wanted to do. By that I mean that I have had clients make quick decisions that seemed totally contradictory based on prior discussions and I have helped several avoid bad decisions. There is a fine balance and some people do not like to be questioned but I will leave that for another day.

So what does the title of this post mean?

Thank you for reading.

Andrew Wetzel

Century 21 Alliance

Proud Real Estate Consultant

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

No virus found in this message.
Checked by AVG - www.avg.com
Version: 2012.0.1890 / Virus Database: 2109/4694 - Release Date: 12/21/11

Click here to download:

TalentSh.dat (751 KB)

(download)

Click here to download:

Nursing_Home_Talent_Show.wmv (546 KB)

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