More info…
I guess it’s now official. The real estate bubble has burst. When the inventory figures for homes show they are going up nationwide AND it’s in the national media, you can be sure that it’s already been happening for a few months now. The NY Times and Jouranl and just about every other news outlet decided today that it was a story – so I guess it’s official.

Those of us in the real estate business have known it for the last 3 months and we could have told you so. We have sales figures and “time on market” statistics that can back up our claims. We have been telling successful sellers what’s happening and how to price their homes accordingly. Now – 3 months later, the media is catching on.

The story is that the supply of homes on the market is rising and the number of buyers isn’t. What that means to you is that your home will sit on the market longer without selling. In fact, two of the articles I’ve read state simply that it would take over 6 months to sell all the homes currently for sale. What they leave out is that more homes come on the market every day, further increasing the glut.

As the number of homes on the market increases, it takes further price reductions to get some of those homes to sell quicker, which, in turn, lowers the reflected market price of all homes. Sellers will wait and wait and then lower their price – too late. What they don’t realize is that they are chasing the market down.

The market price of their home goes down and then they lower their price just above the market price and wait. While they wait, the market price goes down further, putting them farther and farther away from the market value, until they lower the price again.

So, as a seller, what should you do right now?

Simple, lower your price to a point that is BELOW the current market value. Ask your agent to take some time and do a good market analysis to get a feel for what your home is worth right now. Then, price it below that number. If you do this, you will have hungry and willing buyers lining up to make offers on your home… but only for a short time in a falling market. If you wait too long, and the market coninues to drop, then you will be priced above the market again and have to reassess the situation.

The smart thing to do is price your home low and let the market come to you, rather than chasing the market down. One strategy results in buyers, the other results in foreclosures. But you have to decide which strategy to persue.


New Blog Network in Birmingham!

There is a new blog network in Birmingham, Alabama! The Realtors at Weichert, Realtors – Access Realty have joined together and created the only real estate blogging network in Birmingham.

The blogs are titled simply by their city names such as: Homewood Homes, Hoover Real Estate, etc., making them easy to find.

The blogs contain the latest homes for sale and real estate news about the local communities. I have included links to the citys that are up on my link list to the right. Check them out!


Which Agent will YOU choose?

Almost any source you looki at will tel you that between 80% and 90% of For Sale By Owners will eventually list their home with a real estate agent. There are a myriad of reasons why this happens but it all boils down to this: agents have the inside track on attracting buyer traffic to the home. They also do it full time so that even when the seller is gone to work, the house is still “for sale” and can be shown.

So, if you find yourself thinking of hiring an agent, which one should you hire?

First of all, consider paying the highest price for a good agent. Interview several of them and then ask them to cut their fee. The one that refuses to is probably your best bet. Why? When it comes to selling your home and getting your proce, you want an agent who is NOT a noodle…someone with a little back bone. If they won’t cut their fee and they promise a higher level of service and service quality, then they will also negotiate the hardest in the trenches when people are trying to cut your price on your home.

Second: if the agent you call doesn’t answer their phone or call back within a half hour – stop trying to get them. If they don’t answer or call back when you try to call them for an interview, what makes you think they will answer calls from buyers for your home?

Lastly, when you are doing the interview and listening to the agent’s marketing plan, look for the things that are different. If you talk to 2 agents and they pretty much do the same things… a sign, MLS, and a few ads… keep talking to more agents. What you are looking for is the agent who has a unique approach or ads value by adding unique tools. Agents that use the talking house transmitter or a 24 hour hotline system are some examples. If the agent you hire isn’t doing extra things to make your home stand out in the marketplace, you are just going to get the same ole, same ole. Look for something different.


Can my Agent Give me a Rebate?

I hear this questions a lot in the daily real estate game, “can you give us part of our fee back after the closing?”

The answer is yes but only if done in a certain way.

RESPA, the Real Estate Settlement Procdures Acts, requires a couple of things that need to be mentioned. The first thing is that payment cannot be made for services not performed. The second one is that if any payments are made, they must be disclosed on the HUD-1 Settlement Statement.

Futher, Alabama License Law, and most states License Laws, require that no “rebate” be made to any party in a real estate transaction from another party. Another section of the code also requires that the TRUE terms of a real estate transaction be diclosed to the lender or lending institution.

What does all this mean? For starters, if your agent says they can give you cash back after the closing, in nearly every case, this is both against case law and the license law governing the licensees in your state. So – in short – don’t do it. If you are a participant in a transaction and you recieve cash back later, after the closing takes place, then you are participating in loan fraud. Fraud is a crime. Because the lender didn’t know that you were receiving additional cash proceeds from the sale, they are not aware of the TRUE details of the transaction. Alomst every loan program for the purchase of a home has the provision that the buyer cannot receive what is called “cash out” – that is – get money back when they make a purchase. This, in essence, would be overfinancing the home. on a refinance, however, this is okay.

The way to get a credit back from your agent is to have the credit put on the settlement statement as a CREDIT to you and then the credit is applied to any costs you have to pay at the closing table. This applies whether you are buying or selling.

Basic Rule of them: If you can put the cash payment on the HUD-1 settlement statement so that it is disclosed to all parties, including the lender, chances are it’s AOK to do it.

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