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Would you let a car mechanic perform heart surgery on you?

If this is the extent of your real estate holdings, you probably don’t need this article. If you have, or want, more — keep reading to find out what you need to know.

Would you let a car mechanic perform heart surgery on you?  No?  Every day many consumers unwittingly put themselves in a similar position when they become involved in a real estate transaction.

Below is an excerpt from an email I received, apparently exhorting me to abandon the Associations of REALTORS® that are largely responsible for upholding standards of professionalism within the real estate community.

No NAR, CAR, local AOR and Realtor dues. Stay in business.

It’s that time of year again! You have to pay your NAR, CAR and local AOR dues. We know that this is a costly expense and many agents choose to quit the real estate industry rather than paying these dues. Don’t quit, our brokerage will help you to stay in the real estate business without having to pay unnecessary expenses!

If you would like to keep your real estate license active, but do not want to pay even for MLS access, we have an option for you too. This option will permit you to stay in the real estate industry, buy/sell houses, and receive commission without having to spend any money on a single membership. 

Frankly I find the entire message offensive and chose to share it with you so that you could have a glimpse of what goes on “behind the curtain” in the real estate business.  To be clear, I am a licensed Real Estate Broker in California, so some of this may not apply to other parts of the country.

For me, it starts with the subject line.  It indicates that abandoning the professional organizations that are in place first to protect the public is somehow going to benefit the agent or the consumer.  And that somehow, by doing this, that agent will be able to “stay in business.”

Seems much more likely that it’s a fast road to leaving business.  By disassociating themselves from the Associations of REALTORS® (AOR), these agents are losing a lot — but the public that deals with them stands to lose even more.

A quote from the Danger Report sums the issue up nicely:

The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents. This knowledge gap threatens the credibility of the industry.

The company that sent that email soliciting me to join them seems to be promulgating the problem.

37% of the agents did no business in 2015 according to our local MLS statistics.

According to the Danger Report, an agent with no more than 2 years experience is earning a gross median of $9100 annually.  What about more experienced agents?  The overall median gross income is approximately $45,500. Combine that with the average $6500 in expenses and it becomes more apparent why the email I received may be appealing to so many of the non-productive agents.

I suppose it’s possible that I’m wrong, but it seems to me that the agents’ earnings do have a bearing on their competency.

  • If the earnings are so low, how much experience with different issues can they have?
  • How up-to-date are they on changes in law, necessary documents, disclosure requirements, etc?
  • What kind of familiarity and relationships do they have with other area agents?
  • What is the likelihood that those agents would even recognize the validity of these questions?

I’m not going to tell you that all REALTORS® are great, or that all of those who heed the lure of lower fees (as advertised in the email) are horrible because you already know that’s not true but I will tell you that overall there is a difference and you deserve to know what kind of help you are getting.

This is just scratching the surface of the differences between REALTORS® and those that are governed merely by the state provided license.  To find out more, feel comfortable giving me a call (661.375.REAL), sending an email (ProsBlog@YourRealAdvantage.com) or commenting below.

 

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Why Might Short Sales Stabilize the Real Estate Market?

Find out why foreclosure may not be your best choiceI hear from lots of prospective buyers that want to get a list of Tehachapi foreclosed properties so they can look for the “best deal.”  The truth is a foreclosed property may not be the best deal whether you are the occupant of the foreclosed home, or the prospective purchaser.

As the occupant, if you are just waiting for the foreclosure to go through, you’re not really doing yourself, or your neighbors, any service at all.  I understand that the entire situation is distressing and stressful.  You probably already went through one or more attempts at a loan modification.  I’m sure you’ve had plenty of offers of “help” that didn’t seem very helpful.  Regardless of what your history has been, it’s pretty much never a good idea to stand by and let the lender foreclose.

As the seller, you can salvage the shreds of your credit rating by taking action.  In addition to stopping the free-fall on your credit rating, you’ll be able to hold your head up and move on with your life.  How do you do that?  Consider a short sale as an alternative to passively waiting for foreclosure.

Why is this good for your neighbors?  A foreclosed home typically sits vacant for extended periods of time while the lender is readying it for sale.  During that time, squatters may move in, but whether they do or not, the property continues to deteriorate while it sits there waiting.  This means that the value is going down while it sits too.  This spiral is contributing to the issues we face today with market values dropping because when these distressed properties finally do sell, they are the comps (comparable properties) that are being used to help value the properties for which buyers are getting loans.

Foreclosed properties typically will sell for a little bit less than non-foreclosures, but those savings come at a cost.  The costs can include both time and money.  A foreclosed property will, most often, need some work done in order to bring it up to the standard of a non-foreclosed property.  That means that it may not be the best deal when it comes to buying.

It also takes a special kind of person to look past the problems and see the beauty that can be revealed with some sweat equity.

It takes an even more special seller to take action and try to sell the house before the lender forecloses.  If you are that kind of seller, I’d be happy to talk to you about options.  Why not call today?

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Real Estate News Roundup for October 27, 2010

September Sales and Price Report According to the CALIFORNIA ASSOCIATION OF  REALTORS® (C.A.R), September marks the second consecutive month of sales gains.  This news is tempered by the fact that the median price of homes has dropped since August.

The seasonally adjusted home resale activity was up 3.8% in September as compared to August 2010.  However, this marks a 12.2% decrease from September 2009.

The median home price fell 2.7% in September from August’s $318,660 median price.  September’s median price of $309,900 marks a 4.5% increase from the same period a year ago.

C.A.R. also reports that the housing inventory in California is low as compared to the rest of the country.  California’s Unsold Inventory for single family resale homes is 6.2 months in September.  This represents the average amount of time needed to deplete the supply of homes on the market at the current sales rate.

Thirty year fixed mortgage rates are down almost 3/4% in September 2010 as compared to the same time last year.  September rates were reported at an average of 4.35%.

If you are interested in specific figures for your area, just fill out the contact form, send an email or call using the information on the contact page.

Highest Historic Inventory Levels Nationwide Trulia reports that price reductions for homes currently on the market have increased for the fourth month in a row and reached an all-time high of 27%.  This dramatic price reduction increase began in June 2010 for many cities across the country.

It is not unusual to see an increase in price reductions between June and October.  As we settle into fall, many sellers will reduce the price in order to sell a home that did not make the summer selling season.  Trulia attributes the increase in price cuts this year to buyer apathy and continued fall-out from job loss.

They report the top 10 cities nationwide for price reductions from June to October as follows:

Rank City % of Price Reductions in October 2010 % of Price Reductions in June 2010 % Increase
1 Las Vegas, NV 29% 10% 194%
2 San Diego, CA 26% 16% 64%
3 Sacramento, CA 27% 17% 61%
4 Fresno, CA 29% 19% 51%
5 San Jose, CA 23% 16% 46%
6 El Paso. TX 20% 15% 36%
7 Virginia Beach, VA 35% 26% 33%
8 Honolulu, HI 25% 19% 32%
9 Oakland, CA 17% 13% 31%
10 Omaha, NE 32% 25% 29%

Price reductions for the top 10 western cities are even more dramatic:

Rank City % of Price Reductions in October 2010 % of Price Reductions in October 2009 % Y-O-Y Increase
1 Fresno, CA 29% 14% 105%
2 Houston, TX 29% 17% 68%
3 San Antonio, TX 23% 14% 61%
4 Las Vegas, NV 29% 19% 55%
5 Mesa, AZ 38% 26% 46%
6 Arlington, TX 32% 22% 43%
7 Phoenix, AZ 39% 27% 43%
8 Virginia Beach, VA 35% 26% 33%
9 San Diego, CA 26% 20% 31%
10 Dallas, TX 35% 28% 24%

Despite Slowing Home Sales, Buyers Bid Above Asking Price Let’s temper some of the doom and gloom with some potential good news for home sellers.

ZipRealty’s 3rd quarter Home Hunter report shows that homes at various price points are selling above the asking price.  Fifty percent of the top 10 “hottest” zip codes nationwide are located in California.

What are your thoughts?  Share your comments on this story and let us know what you think.

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3 Reasons to Buy a Home in Tehachapi

Have you been thinking about buying a home in the Tehachapi area?  You’re in good company.  There are lots of compelling reasons to own your own home, but what makes now a good time to buy?  See if you agree with these three reasons to buy a Tehachapi area home:

Stocks are up 50% from the March 2009 bottom.  Some commodities have risen dramatically.  So, what’s that leave as a good investment?  Real Estate as an asset class is still way down in the cellar according to Michael Murphy, editor of the New World Investor stock newsletter.

  • Desperate sellers comprise two categories — owner occupied and lenders.  Both are looking to unload properties that are underwater and or already foreclosed.  Buyers who are patient and have the right REALTOR® t help them push through the process stand to get some great bargains.
  • Little Competition exists because most people don’t have what it takes to negotiate their way through short sales and REOs.  It’s even difficult to find a REALTOR® that is experienced with and willing to handle these types of transactions.
  • Low Rates for mortgages.  Rates are at their lowest levels in 40 years.  Since most people believe that inflation is inevitable, locking in now is a great idea.

Did you know that there are 279 properties in Tehachapi that are classified as “distressed” today?  That represents a significant opportunity in for a savvy investor.  Want to find out which properties in your neighborhood are in foreclosure?  Need help deciding how to move forward with your own home purchase or sale?  Use the form on the Contact page, or phone or text to discuss your options.

Share your thoughts down below.  Your opinion matters!

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