lake zurich...and beyond

I pretty much survived on macaroni & cheese, cereal, ramen noodles and taco bell in college. It was cheap and I was broke.

One of the things I routinely ask my new buyers is, "do you like macaroni & cheese?" The reason I ask this is not because I'm curious about the eating habits of my buyer clients. I use it to open a discussion about the difference between what the loan officer tells them they can afford and what they may actually be able to afford in real life. 

Loan officers are notorious for painting a best case scenerio for buyers. "Congratulations!" they say, "you're pre-approved for a $300,000 house!" Of course, my buyers are surprised and excited to hear that they can afford so much more than they originally thought and want to run right out and look at $300,000 houses.

"Not so fast" I say, "do you like macaroni & cheese?"

"Um, yes" they say.

"Do you like it so much that you are willing to eat it every day?"

"No. Why do you ask?"

This is when I encourage them to think about what they are truly comfortable paying for a house on a monthly basis. Are they willing to eat macaroni & cheese or ramen noodles every day (because they can't afford 'real' food)? Do they want to furnish their new house or be able to make improvements or repairs once they move in? Do they have a vacation planned or are they saving for a wedding or other future event? Do they want to contribute to their 401K or are they expecting a baby? In other words, how does the purchase of a house fit into their overall financial picture and their other hopes, dreams and life goals? 

Many times, my buyers will tell me that they are willing to sacrifice literally anything to get into the house of their dreams. Other buyers will tell me that they hadn't thought of it that way and they scale back slightly and decide to focus on a price range that will allow them to live more comfortably after the purchase.

In either case, the decisions are solely theirs to make, but I feel better knowing that they fully understand and are comfortable moving forward with the purchase of their new home. Who knows, maybe macaroni & cheese is their favorite food!

I admit it. I love watching real estate related reality shows on TV. The decorating, remodeling and gardening shows never fail to give me plenty of ideas for my own house. The house hunting shows, on the other hand, usually just amuse me, because I've found that many times things aren't quite like they appear on TV.

I would love to see a reality house hunting show based on finding and purchasing a short sale or foreclosure property!

Imagine this scenario:

Agent and buyer walk up to the property, sidestepping weeds and broken concrete. Agent comments on the gorgeous peonies (the only nice thing visible) while opening door for buyer, after first removing notices from the authorities that the water is being turned off, and that the home is in violation for having an un-mowed lawn. When the door opens, buyer hesitates, then wrinkles nose as smell wafts out. Gathering deep breaths, agent and buyer enter the property. The camera pans around to highlight discarded furniture, garbage and other debris. Ever determined, buyer and agent press on (maybe it's just dirty?) and discover that the house is, in fact, a total gut job. Buyer refuses to go in the basement, afraid of what might be down there. Agent and buyer leave, with buyer rooting around in her purse for her Purell hand sanitizer. Agent and buyer chuckle...on to the next one!

Now, some of these properties are truly a diamond in the rough (albeit very rough). It might make for interesting reality TV to show the distressed property search, the offer/acceptance process (imagine the drama produced by buyers nervously awaiting the acceptance or rejection by the bank!) and the home inspection (egads!). Then, finally, showing the buyers several weeks months after closing when all the improvements have been made and the house is actually habitable again (you know, the happy ending).

Now there's some reality for you! Hmmm, I wonder what they would call the show?

After 250 days, one of my listings finally closed today. At first glance, 250 days on the market seems like nothing to cheer about. However, to put it in perspective, the average market time for currently listed 4 bedroom homes in Hawthorn Woods priced between $450,000 and $550,000 (for the same time frame we were listed) is 283 days right now. The average closed market time is 271 days. Therefore, my sellers feel lucky. I feel lucky too!

When I first listed the house back in October, the market was entirely different than the market we are in today. The closed comparables supported a higher list price at that time. The broker open house and number of showings (over 55 showings in all) supported that price as well. My sellers did not want to do expensive updates prior to selling, but they painted, removed wallpaper, and the house showed beautifully every time. Feedback was almost always positive, but time after time, the buyer's agent would say that the buyers simply weren't ready to buy yet. They weren't buying a different house; they simply weren't buying at all. It was frustrating, to say the least, for all concerned. 

Thanksgiving, then Christmas, came and went. My marketing efforts brought a steady stream of potential buyers. Every Monday morning I sent reports to my sellers showing them the current market statistics. Our market prices were declining, and a particularly harsh winter didn't help either. We were forced to reposition the home in the market several times. My sellers (bless them) continually told me that they trusted me and my expertise. I, in turn, promised I would do everything I could to retain as much of their equity as possible. They listened and followed my suggestions. Truthfully, this has been one of the most pleasant listing experiences I've ever had, because of the sellers I was working with. 

When the offer (and later, the home inspection results) came in, my sellers did everything in their power to make it work for both parties. It was to be a quick closing, so the past few weeks have been a whirlwind of packing, finding temporary housing, searching for their next house, writing an offer, negotiating, attending the home inspection, etc., all the while trying to maintain some semblance of family and work life. But through it all, they kept their positive outlook and just worked through it. They moved out yesterday in 90 degree heat and oppressive humidity, then went back and spent 3 hours cleaning the house to make it perfect for the new buyers. Amazing. 

At the closing a few hours ago, I got to meet the wonderful new owners of the home. I couldn't be happier for them, as they are getting a fantastic "forever" home with a huge park-like lot and lots of space for their family. With a few updates and within a few years, they will most certainly reap big rewards. I think they feel lucky, too. 

A while back I wrote an article entitled, The 4, no 5 P's of Marketing Your Lake Zurich Area Home. My 5^th P was Perseverance. Well, that perseverance paid off today, on Friday the 13^th no less. It was an occasion where agents, sellers, buyers, attorneys and the lender all worked together to make it happen, and everyone is happy as a result. It's been a lucky day, indeed. 

There are lots of foreclosure, pre-foreclosure and short sale properties on the market. Despite the abnormally low list prices, these properties sit, and sit, and sit on the market. Ever wonder why? I'm sure all the agents out there know the reasons already, but apparently the banks are completely clueless!

This past weekend I showed several of these properties. Here is some of what I noticed on this particular outing. Banks, please take note!

1. It's nearly impossible to make a showing appointment. I need to call Agent Missing-in-Action that you hired (for some unknown reason since the home is not being marketed) and leave a message. Then I must wait for a return phone call confirming my showing. Sometimes that call is returned, sometimes it's not. Sometimes I get the privilege of calling a remote showing service. Instead of asking my agent ID number first (too easy), they ask me to spell my last name 100 times. Then they ask my agent ID number <sigh>. I picture them sitting in a cubby in Timbuktu with headphones on like telemarketers filing their nails.

2. Banks may or may not pay the commission offered in the MLS as evidenced by these 5 little words: "commission subject to bank approval." And they wonder why any of us want to show their properties, let alone sell them. Trust me, you need us. Pay up.

3. Dirty, smelly, broken doors, missing appliances, un-mowed grass, and worse. Much, much, worse. Of course, the remarks say, "move-in ready!" Honestly, has anyone from the bank ever visited one of their properties? Apparently Agent Missing-in-Action hasn't either, at least not recently.

4. I show up for my scheduled appointment and even though I was told that the "owner-tenant" would be there to let me in, nobody is home. Yeah, I can imagine the soon-to-be-homeless "owner-tenant" is going to be super cooperative and help get the home sold lickety-split. What are you thinking? <eye roll>

5. Four or five families living in a 3 bedroom, 1 bath home. Enough said.

6. "Allow time for bank approval" which happens to be 4.5 weeks on average according to the Illinois Association of REALTORS. I could build a whole new house in 4.5 weeks with my own two hands and a little pink hammer. It's not War and Peace, it's an offer. It should take about 4.5 minutes to accept or reject. Just do it.

Your foreclosures are clogging up the market with unsold inventory. You, the bank, are losing money by the minute. You've already made bad lending decisions, now you are compounding the problem by making them difficult to sell. The first thing you should do is hire a professional REALTOR who will market it properly and (shocking, I know) guarantee to pay the full commission. Make sure the home is at least clean. Make it easy to show, easy to sell, easy to get a response.

Oops, you just lost another dollar...better act quick...there goes another one...

Buyers often come with a wish list of what they would like in their new home. Wish lists can be lofty, realistic, practical or optimistic.

I like optimism. I like wishes. I like having a list of what my clients want and/or need in their new home. What is important to them vs. what is not so important. I like having a starting point.

I'm working with some first time homebuyers who have a great wish list. They are young, smart and practical. Having lived in an apartment for a while that is, well, lacking, they know what they want. They met with their lender before meeting with me for the first time to get pre-approved. They ask questions. They listen. They're fun to be with. They are determined.

A real estate agent's dream.

My job is to take their wish list and figure out a way to make it happen for them. It may take a few twists and turns, a little tweak here or there, perhaps a compromise on their part for no house is perfect. We will see plenty of homes that just won't make the cut. Wrong neighborhood, wrong layout, too much work needed or too far a drive to and from work. And we will see a few with great potential; the ones that might just work after all.

The key is that in the days and weeks ahead we will be working towards fulfilling their wish list together. For that's what real estate agents do, really. We are in the business of helping our clients make their wishes come true. How cool is that?

I have writer's block. So, I'm just going to throw out there a few random thoughts that have crossed my mind this week instead of trying to write an intelligent blog post.

RANDOM THOUGHTS/MUSINGS/QUESTIONS

1. Why would anyone use AOL? Especially for a work email address? Now that they advertise at the bottom of every email (which is ridiculous by the way) emails come with "trade secrets for amazing burgers." Maybe it's just me, but I don't want a link to the Food Network on my email.

2. Properties that require bank approval (ie. short sales and foreclosures) sometimes reduce the amount of commission offered in the MLS to the selling agent. Not wanting to work for free or drastically reduced commission, I ask if the buyer is willing to pay the commission (or pay the difference between what the bank would pay and 2.5% commission) and ask them to sign a buyer agency agreement to cover that possibility. What would you do?

3. When a client says they want to downsize, what do they mean? As real estate agents, we must be careful to listen to our clients carefully. One client may actually desire a smaller house but can move up in price, another may want a larger house with a smaller price tag. Still another may want a smaller house with a smaller price. Listen.

4. Are you sick of political crap talk yet? I am.

5. How come every time I log onto certain websites, I receive their catalog 2 days later in the mail? I feel like I'm being cyber-stalked.

6. Have you logged onto realtor.com as a consumer might recently? I'm not sure why anyone would use it. It's slow, there are ads going "blinky-blinky" all over the place, listings that have sold are still showing as available, and you can't search by subdivision. And to think of all the money I throw at them every year for the priviledge of placing my listings there. Sheesh.

7. It's so fun to come home when you have a puppy. Who knew?

Okay, not only do I have writer's block but I'm also out of random thoughts. Scary. Anybody have a real estate topic they want to discuss?