Real Estate Zealot

Dont Miss the Opportunity to Buy Up in a Down Market!

Now is the time to make that move and get more when you buy in today's market.

Metro Broker Pete Doty has all the resources and experience you need to help you find that perfect home.

Hi I'm Pete Doty. I'm here at the 2011 CAR Convention in downtown Denver, Colorado.

I am so excited about the Denver real estate market, there are two reasons. Number one I saw this in '88 and '89, prices started going down, and they started climbing again. People missed the opportunity to buy up in a down market, and that's really what's going on right now.

We don't have a lot of inventory, we need houses to sell and you can take advantage of the higher price range and get into a house for a lot less than you would have a couple of years ago.

So right now is the time to move! Call Pete at (303) 880-5585, or better yet take a look at my website DenverRelocation.com, as well as my MetroBrokersOnline website. Thanks.

Call Pete Doty at 303-880-5585

Moving Ahead without the Tax Credit Incentives

Alison Brennan talks to us about how the tax credit effects home buying, as well as how the extensions affect sellers and buyers alike.  She also discusses opportunity that still exist and how to be creative without the government’s help.

 

 

BrokerIPTV January-February 2008 NewsReel

IPTV January 2008 NewsReel

 

Denver is 1 of Only 12 of the nations 50 Metropolitan areas have a high risk of price declines, according to the PMI Mortgage Insurance companys Winter 2008 Market Risk index.  This index is based on the 3rd quarter Office of Federal Housing Oversight data, and ranks the 50 largest metropolitan areas according to the likelihood in price declines. 12 of these metropolitan areas have a 1% or less risk of price declines.  Areas that had the highest price run-ups in recent years are at highest risk of price deterioration.

http://www.rockymountainnews.com/news/2008/jan/16/metro-area-home-values-likely-hold/

 

If you lost a home to foreclosure last year or paid mortgage insurance premiums, there is some good news.  Congress enacted laws in late 2007 to allow deduction of some mortgage insurance premiums. This could amount to a tax break of up to $350. The foreclosure tax break applies to all taxpayers who were granted forgiveness of mortgage debt.  Previously, this amount was fully taxable and could have run into the tens of thousands of dollars.

http://www.businessweek.com/ap/financialnews/D8U6GH5O0.htm

 

On the subprime mortgage crisis front, Bank of America has announced a deal where they will buy the troubled Countrywide Financial for $4.1 billion dollars.  This will make Bank of America the nations largest mortgage lender and will provide much needed relief to the largest independent mortgage banker.   While this acquisition is a major step in solving the mortgage meltdown, more failures and acquisitions are anticipated in the coming months.

http://www.msnbc.msn.com/id/22606833

 

Consumer Confidence showed a slight increase in December, according to the Conference Board.   Consumers also believe that there will be more jobs in the future and that their personal incomes will be higher in the coming months.  While these are bright spots, overall consumer sentiment seems to point to a slowing of the economy.  The Conference Board developed and reports monthly on consumer confidence, as well as the Leading Economic Indicators report, which is expected at the end of January.

http://www.conference-board.org/economics/consumerconfidence.cfm

 

First American Corporation, one of the largest national title insurers, announced plans to spin off its financial services business.  It also announced a 4th quarter loss, due mainly to costs from the California wildfires.  They also announced plans to aggressively manage employee costs, and are looking to move processing jobs to counties like India and the Phillipines.  Chief Financial Officer Frank MacMahon said that up to 40% of their workforce may be moved offshore.

http://www.reuters.com/article/bankingFinancial/idUSBNG6641820080115

 

In Technology news, Google has announced plans for expanding its offerings for the IPhone.  Google introduced access to mail, calendars, search, and Google Reader last month and unveiled additional enhancements that allow better navigation and easier user interface, using the iPhone touch screen.  Google gadgets are now available for the iPhone as well.  Google is moving forward with the Android mobile platform, and phones using this platform are expected later this year.

http://www.internetnews.com/wireless/article.php/3721541

 

A 40 hour laptop battery?  Researcher at Stanford Universitys Department of Materials Science and Engineering have found a way to give rechargeable lithium ion batteries  as much as 10 times more charge.  These batteries are used from everything from iPods to laptops.   A patent has been filed for the technology and negotiations

While US home-price index falls, Denver is the shining star

Denver Colorado home sale statistics are better than local or national media would lead you to believe. While the US National Home Price Index posted a record annual decline through August 2007, Denver Colorado home sale statistics remained stable. The old saying "the higher you rise the harder you fall," is coming down hard on some cities. At least that's what the data from the quarterly S&P/Case-Shiller® US National Home Price Index reveals.

This information covers the annual returns of the 10-City Composite and the 20-City Composite for August 2007. The 10-City Composite was down 5.0% from August 2006, which is a rate not seen since June 1991. The lowest on record was an annual decline of 6.3% recorded in April 1991. The 20-City Composite recorded an annual decline of 4.4%.

According to the report, “Only two metro areas – Denver and Detroit – showed improvement in their annual returns and even those were reports of slightly less negative numbers." Denver Colorado home sale statistics dropped less than a percentage at -0.4% and Detroit recorded a drop of -9.3%. While losing less than a percentage point in a year may not seem to be great news, that depends on where you live. Denver would be nearly 9 percentage points better than Detroit and a massive 10 points better than Tampa!

As has always been the case, Denver Colorado home sale statistics run counter cyclic to the rest of the nation. Lawrence Yun, National Association of Realtors® senior economist emphasized all real estate is local with naturally large variations within a given area. “Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year,” Yun said. “Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.” - www.realtor.org

Appraiser Sees Another 10% Hit For Metro Denver

BrokeripTV  : Jay Vicci from Rocky mountain valuation calls Admas county and brighton our new forclosure belt We are taking with Jay Vicci today from Rocky mountain valuation, Jay has been an appraiser for 18 years as trained appraiser. Jay the topic what adds value to your home, what doesn’t. Let’s start off because every home owner wants to know what can they do to add value to their home. Give me your top three suggestions.

Jay Vicci: Kitchens, bathrooms and any repairs.

 
BrokeripTV  : Really?

 
Jay Vicci: It’s too much volume for people to want to buy house and fix it up. Do not leave anything undone.

 
Displayed Question: WHAT SHOULDN’T I DO TO MY HOME WHEN SELLING?

 
BrokeripTV  : What doesn’t add value? What is just pennies on the dollar?

 
Jay Vicci: Anything that only appears to a very small market segment. Building cappuccino maker [phonetic] I mean that can it I mean very specialized items said like that are going to give you, you need the broad market appeal in this market there is too much inventory out there.

 
Display Question: WHAT SHOULDN’T I DO TO MY HOME WHEN SELLING?

 
BrokeripTV  : Give me a surprising statistics from 2007 that most people in the real estate industry would not expect?

 
Jay Vicci: I just pick this up today and I was little bit shocked by the end of 2007 there are another 2 million adjustable marketers, there you can know just outside a people’s budget.

 
BrokeripTV  : Wow.

 
Jay Vicci: That’s going to be bad.

 
Displayed Question: WHAT SHOULDN’T I DO TO MY HOME WHEN SELLING?

 
BrokeripTV  : Now Colorado lead the nation for a while and foreclosures. I don’t know where we currently stand on that, we still pretty are like 1, 2 or 3.

 
Jay Vicci: We are top 5 for sure.

 
BrokeripTV  : We are Top 5.

 
Jay Vicci: For sure.

 
BrokeripTV  : And is there a particular area that’s getting hit the worst. I am hearing Adams county, is that right?

 
Jay Vicci: Adams county the north east corner of that metro area, Brighten and Henderson, commerce city. The town of the foreclosure belt.

 
BrokeripTV  : And is this because the people in these positions guardian to the adjustable  just a time above?

Jay Vicci: Absolutely they buy it on an adjustable rate, mortgages, and could barely qualify for the teaser rate or the lowest on the lowest payment that they first started with and as soon as they have adjusted they are out their budget. They couldn’t afford that. They were banking on it appreciating and then we were financing out within two years before the loan adjusted.

Display Question: WHAT AREA OF COLORADO COULD BE THE NEXT “HOT SPOT?”

BrokeripTV  : I read your crystal ball here and for 2008 where is the hot area going to be?

 
Jay Vicci: I think the area I said earlier that older brick homes and town that seem to holding that seem to very popular, their established neighborhoods and presumes in appeal they are in their holding well.

 
BrokeripTV  : What type of appreciation do you think a home owner can expect on into 2008 because it’s been all over the board?

 
Jay Vicci: Minus 10.

 
BrokeripTV  : Really.

 
Jay Vicci: I don’t think appreciation is the word we are going to be using.

 
BrokeripTV  : Really.

 
Jay Vicci: I think with the fall out from the art, the adjusted right mortgage is coming down the pipe and where the economy is right now. I don’t think appreciations even going to be a word we can use.

 

Denver Real Estate Market Ready For Steady Climb

BrokerIPTV  : Denver Real Estate Market Conditions Ready For Steady Climb.  We are talking with Bill Cummings today, the director of real-estate advertising for the

Denver

newspaper agency. Bill, the current market, its in a trickle down effect and everybody involved in real-estate business. How is it affected the newspaper?

 

Bill Cummings: Well, its impacted on newspapers. We are lucky, I came from the

California

market, we are lucky in the

Denver

market that we didn’t have a bell curve. So, we didn’t have sharp increases, which means we didn’t have sharp decreases. So, the

Denver

market appears to be a steady climb, of course national association of REALTORS as

Denver

’s one of the top five markets that will have the comeback first, so we are looking forward to that.

 

BrokerIPTV  : Yeah, well you got that right. How about builders? Builders in the past were famous for doing two big page layouts and things like that. Are they still spending the lot of money?

 

Bill Cummings: Builders have cut back, but they have also cutback on their building in the market place. We are about 40% less new builds that are happening in our metro and our revenues are pretty much aligned with that. When you don’t have houses to sell, you don’t have a need to advertise. I think those that are selling houses are still very serious and they still by large presence in newspapers and website.

 

BrokerIPTV  : The prediction game. You mentioned that you thought that Denver was going to be one of top five and they are going to bounce back quickly a lot, say 12 to 18 months before we are back go to normal, is that what you are thinking?

 

Bill Cummings: I don’t know what number is anymore. What we know is we don’t know, but our going strategy for both the

Denver

post and the rocky mountain news and the river state products, were developing is to help the ply inventory. We have a tremendous amount of foreclosures in the market we have tremendous amount of homes that are resale on the market and if we can help the pleat that get rid of the – get that product sold then that will help support price increases. So, that’s part of what we are doing. We are coming out lots of new things to help do that.

 

BrokerIPTV  : Have we seen the worst of the mortgage mess?

 

Bill Cummings: I am not sure, we probably have to leave that up to the justice department to say whether we have or not. I think there is a lot of things that going to be better, but in the medical world sometimes you have to re-break the bone a couple of times before you get it to set right. So, I don’t think we are out of the woods yet.

 

BrokerIPTV  : Finally, if you are realtor. What would be your strategy today?

 

Bill Cummings: I would be consistent. I would make sure people know how to get hold of me, either on line or with the telephone and I would make sure that my sellers are real happy.

 

BrokerIPTV  : I know I shouldn’t must ask about buyers, because that seems to be the thing that everybody, every realtor wants to know how can I find more buyers?

 

Bill Cummings: Well, again buyers are going to be coming from the immediate see is the buyers are coming in from out of the market. I have heard that we have somewhere between 50 and 60,000 new people moving into the

Denver

region. So, many of them are going to look for place to rent or home to buy. So, I would make sure that I am on websites, I am in news papers and I am in things like our new publication called Real-Estate Showcase.

 

BrokerIPTV  : And cozy after your relocation department.

 

Bill Cummings: Cozy after relocation department.

 

BrokerIPTV  : Bill thanks very much, [Misc. Voice] I appreciate it.

 

Bill Cummings: Thanks for having me.

Inside Scoop On Liquidity Crisis From Appraiser

BrokeripTV : Inside Scoop On Liquidity Crisis From Appraiser....We talking with Jay Vicci today from Rocky Mountain Evaluations Jay is an appraiser and has been for eighteen years. He has trained appraisers. He has been on review boards. Jay thanks for joining us. The mortgage situation and appraisals. Are they separate problems or are they tied together?

Jay Vicci: They are tied together.

BrokeripTV : Ok.

Jay Vicci: Definitely. I think a lot of the mortgage problem we have right now are based on poor appraisals.

BrokeripTV : Really?

Jay Vicci: Yes, absolutely. I think we have had over valued properties for a very long time and it was more of the trend rather than the reception and I think we are paying for it now.

Displayed Question: IS WALLSTREET’S PERCEPTION OF THE MARKET ACCURATE?

BrokeripTV : I actually had heard some whispers when we are going through the liquidity crisis in the beginning of August that Wall street, the fair and so forth didn’t think this was necessarily a bad thing, because they pretty much predicted that homes were over valued by about 10%. We saw a 10% correction in the market. Is that fairly accurate?

Jay Vicci: At least 10%. Some areas as much as 30%.

Displayed Questions: WHAT ABOUT CONSUMER CONFIDENCE?

BrokeripTV : So how does a consumer regain their confidence in their appraiser or their lender in the process that ties in both together?

Jay Vicci: First of all they have to be accountable. They have to look at what risks were involved and they have to look at situation realistically with where their property is.

BrokeripTV : It is a thing of last couple of years. There were some appraisers out there that were able to be pushed?

Jay Vicci: Absolutely.

BrokeripTV : Really.

Jay Vicci: Without question.

BrokeripTV : Why? They didn’t want the lose the client. They didn’t want to lose the relationships.

Jay Vicci: They didn’t want to lose the client. It looked like there is another dollar. They didn’t think there was any repercussions they are doing it otherwise.

Displayed Questions: WHAT’S YOUR OPINION ON COLORADO’S ATTEMPTS AT CURBING APPRAISAL CORRUPTION?

BrokeripTV : Well, the Colorado real estate commission has taken one step further. They have made a decision now to fine and suspend appraisers for over valuing properties, your thoughts on that?

Jay Vicci: Long over do.

BrokeripTV : Really?

Jay Vicci: Long over do. I have appraised I mean I have done review of appraisals and I have seen work that has been pushed by over 50%. We are talking a $150,000 property valued to over $225,000 or $250,000 and from certain appraisal shops in town I have seen it regularly and it’s over do.

Displayed Question: HOW ABOUT THIS SCENARIO…

BrokeripTV : Let’s say I am a home builder. I going to build a 125 homes in Colorado. You are going to be my guy for appraisals and home values. Can you be impartial in that situation when you are working for a home builder?

Jay Vicci: No, I will take it one step further. I don’t think a home builder should be able own a mortgage company. I think it’s a conflict of interest and allows them to drive the market.

Displayed Question: WHAT’S YOUR TAKE ON AVM’S?

BrokeripTV : What your take on the new AVM models and do they help with the fraud situation?

Jay Vicci: Rarely. I am not a big fan of AVM simply because they are based of public records and tax records and access reports of records and I see too many errors in those.

Displayed Question: WHAT EFFECT HAS ALL THIS REGULATION HAD?

BrokeripTV : Final question on this topic. As a result of the increased scrutiny, I mean how much tougher has your job become?

From Behind The Glass Window

I had the unique opportunity to sit in on several focus group sessions of interviews with past buyer and seller consumers. These focus groups were administered by Anne Randolph Murray from Murray Marketing.  They were held in a the Facilities at Fieldwork Denver.  It was there that we sat behind the glass and were able to observe real life buyers and sellers as they were interviewed by Anne.  I had participated in these type of groups before, but I had forgotten the frankness that consumers can have. Every broker should have to experience this.

Sitting from behind the glass reminds you of how poorly and how wonderfully some brokers run their business.  I think the key word here is "business".   One of the best quotes I know is that people say they want to "try Real Estate" and I know  that in fact , the "Real Estate Business will try them"!  For the professional  brokers in this business, we realize that this is not a hobby.  The fact of the matter is that people getting into this industry to do one or two deals a year (Average number of broker transactions in Denver for 2005 was under two) are making it tough for professional brokers but more embarrassingly the buying and selling consumers. 

Another undeniable focus truth was that all of the attendees used the Internet as part of their normal everyday lives. (yes, that's right Virginia, the Internet and e mail is not a fad) The age spread in the groups was from 27 to 55 years old.  They were very accustomed to using the Internet to gather information and did not find it at all in-personal to receive status updates, information and feedback using Internet based tools.  In fact, some made business model recommendations for Internet transaction services that are already in use...just not by all brokers.

So below I have included the top ten concepts that I gleaned from the focus group attendees.

What we should all know: 

1.  Communication and Accessibility by any means is critical.  COMMUNICATE!  Number one compliant was the lack there of. This includes a myriad of tools from the telephone to IM, email, on line transaction management, secure transaction portals and automated information systems .  This means response times within minutes to at the most two hours and with 24 hours being unacceptable.  People want response and follow up NOW!

2.  Negotiations. People want strong negotiators. To negotiate you have to know something about something.  You have to have confidence to stand with conviction based on facts.  Most of this comes from transactional experience and regional or geographic real estate knowledge (not available on the web). There are thousands of small nuances involved in every transaction and that is what the consumers are willing to pay for!  Experienced professionals will become more valuable and part timers will work for peanuts!

3.  Website and information gathering and access to data is critical.  Consumers want everything!  Sold Comparables, floor plans, days on market and lots of photos- ON LINE.  Mostly, they want photos.  How hard is it to have  photos on a site and tours or video.  What's hard to believe is sites like Realtor.com and even our local MLS, MetroList, have limitations on photos.. They claim they don't have the storage for all these high res photos...hmmm, I wonder if Google base or Zillow are worried about digital storage?  What has Realtor.com done with our billions?  Why is the Denver MLS sitting on millions of our dollars and limiting us to 10 photos?

4.  Have flexibility in compensation or fees.  Most all of the attendees were perplexed and hostile about brokerage fees.  So, if you are still thinking that 2.8% or 3.0% coops are some God given attribute to your existence on earth, you had better start rethinking your future business  model.  You will need to reinvent yourself, or it will be done for you. People don't mind paying you. They just mind paying on a method that has not really changed for over 40 years or because that's what your companies policy is!  Please...spare me.  Remember how they used to sell cars?  You know they would take your offer to the mystery sales manager in the back office and then come back with another offer....pretty stupid. Even more stupid with the Internet!    Make note to self, that the coop field is not present on Zillow.

5.  Stay in communication with your clients after the closing.  Nothing seemed to be more distressing and unprofessional to the consumer than not hearing from their broker after the sale. Only 20% of the attendees even remembered the broker's name that they worked with.   That is a really sad, sad state of affairs.  There are some many low cost ways to stay in touch with past clients. You really wonder what is going through most brokers minds when they do not have a mail list or worse yet, they have one and don't use it?

6.  Explain the process and educate them better.  Once again, people want information.  More listening on our side, less condescending attitudes. They want lots more information concerning the loan process, title insurance and any and all documentation ahead of the closing.  Which really leads to the next point...loser lenders!  Most all of our closings and problems in some way or another lead from unprofessional lenders.  Make sure and educate your clients the problems of working with loser lenders!

7.  Don’t work with loser lenders.  The focus group parameters did not want to focus on lending...it just happened! Like it or not, you are only as good as the loan officer involved in the transaction. Working with a poor quality or poor performing lender can taint not only your professional career, but the entire real estate industry.  Real estate brokers not professional enough to work with high quality  professionals are as much at fault as the loser lender! It appeared that the worst deals were the ones where the loser lender gave the real estate broker a "qualified buyer client" and the real estate broker was hungry enough to take it!

8.  Listen to what they are really looking for or what they really want out of the transaction.  This is probably the most difficult thing for the real Type A sales folks.  Over time it comes to us just due to survival in this profession.  Most of the people were looking for a little more empathy and understanding. An interesting thing is that you can rely this through a number of the points I have pointed out in this post.  Having the systems and staffing and communication tools to give the impression  that you CARE about them. 

9.  Staffing and systems.  According to the attendees, nothing seemed to bring magic to the transactions like having support staff and follow up done by people that were office based on behalf of the broker.  It is critical to have the true backup to make it in this industry.  The old adage of  "if you don't have an assistant, you are one" is now been raised to a whole other level.  If you don't have IT support, you are IT!  If you don't have information gathering, you are the gatherer.  If you don't have people to staff the back office IT services....well you will have to do it.  If you want to provide "High Tech-High Touch" service, YOU CAN NOT DO IT ALONE. 

10.  No need for the huge ego based photos.  Yep, another big annoyance to the consumers were glamour shots (dated 10 years) of brokers larger than the house photo they had listed!  Some of the attendees brought actual ads in with them. I have no idea were this tradition comes from, but I am sure it will no the way of newsprint.  People want information in the form of property information and they want "Caring, Experienced Professionals".  Most of the broker heads shots  portray  the complete opposite. Use discretion, keep any photos honest and up to date. Remember that most consumers really don't care.  It can also be used against you...maybe you look to young, too old, too manly, too womanly, too beautiful, too ugly and a number of other Blink Based judgments!

 

Lowe's vs. Home Depot...

...is like the difference between night and Day. People like Carlos Babb from the Parker, Colorado Lowe's (pictured on the left) make Lowe's a standout company. 

How do I know this?  Well, on the home front I needed a new kitchen faucet.  I purchased it on eBay and the unit was delivered promptly.  I went to install it as soon as it arrived.  Without fail, Murphy's Law always applies to plumbing projects and one of the facet supply lines had a small flaw in the compression nut threads.  This thread flaw was on the nut that connected to the water line.  Needless to say, it would not seat properly  and leaked.

Of course another part of Murphy's Law is that I had guests coming over for dinner that night.  The old faucet was unusable and I did not want to be doing dishes in the bathtub.  Of course I knew that the supply line was custom, but I figured someone at at Home Depot or Lowe's may have a solution.  Maybe a quick fix until I could get the part from the manufacturer.

Home Depot was my first stop, as it is closest to my home.  I won't go into the details, other than it was a non event and difficult to find anyone to really help me (as usual).  The solutions offered were  pretty sad. Even with my optimistic personality, I was feeling somewhat doubtful about finding a solution. 

Next, I headed to a local plumbing shop.   This resulted in no better results and of course since I was not on the clock, they could have cared less. (too much plumber's crack) They claimed to not even carry resale parts!  I started to see the bathtub as my new sink.

Lowe's was the last stop.  I do have to say that even the look, feel and colors as I walked in, felt positive.  I was starting to think maybe cutting the supply line hose and adding a new fitting might be the answer.  Of course, someone asked me if I needed help and I stated that I needed the best plumbing person in the store...within minutes, Carlos Babb shows up.  He looks at the piece and heads to the tool section.  Within minutes, he took a thin file from the tool section He placed my supply line in a vice and started filing away.  Five minutes latter he headed to the plumbing parts and came back with a 3/8 male compression fitting and started threading it in.  Sure enough, and to my surprise, he had it threaded perfectly!  He smiled and stated that I was "back in business".

How can the culture between two companies be so different?   Well, Lowe's hires mostly more full time workers vs. part timers at Home Depot.  Lowe's hires and promotes people that are friendly.  Lowe's provides extensive employee training in consumer behavior and trends.  The result,  Lowe's stock has increased 26% and Home Depots is up only 17%!   I think we as brokers can take a lot of this into our own professions.  Full time and not part time.  Customer service needs to be above and beyond expectations regardless of compensation.  Lastly,  being educated in our field or multiple fields of expertise is critical.  You as a broker need to be the "person of influence" or better yet the "Human Browser".

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