I had the brainstorm of writing today about “What’s your Realtor doing for you today?”
This is a significant topic because, with unsold listing having been on the market for longer than six months, I believe every seller would want to know exactly that. But, the fact of the matter is, beyond advertising, socializing and kibitzing with friends and clients, I’m not really sure most Realtors are doing much to directly benefit the interests of the sellers they represent.
Real quickly, before I get too far, let me go back for just a second. In my last Blog I wrote that not all real estate agents were Realtors and agents who were also Realtors should be held in higher esteem than others. If for no other reason, this is significant because Realtors have agreed to uphold a higher set of standards than non-Realtor agents. Those standards are intended to benefit buyers and sellers alike. Plus, the National Association of Realtors is working very hard to uphold and protect the rights of private property owners and we, as individual Realtors, contribute mightily to such efforts; rights which many of our elected officials are attempting to erode and take away from us.
Now, back to the matter at hand, “What’s your Realtor doing for you today?” Well, in my own case, I’ve had to get as far outside of the box as I could. At times, it would seem like there was nothing that was working. Newspaper, internet and specialty advertising, despite costing a fortune, wasn’t working. Interestingly enough though, buyers are continuing to buy and sellers are continuing to sell. But, since I am dedicated to helping my sellers find buyers who will love and enjoy their properties as much as they do, I felt I had to do something. But, where to begin? Back when I first started in real estate, just out of college, I always said I the more creative I was the more I helped my clients.
Consequently, this is one thing I’m now doing for a property owner in the Spanaway area of south Tacoma, Washington. Their home is an estate quality property with two plus acres, a private pond, creek frontage, a lovely two story main dwelling and a guest house. In reviewing their general neighborhood, I’ve found numerous similar properties. In a letter I have been sending to many of those similar property owners, I write:
“The intent of this letter is simply to introduce you to a nearby property which is listed and available for purchase. Being that it is also on acreage, it is similar to your property. To some degree, I sense that properties like yours have an estate quality and offer prospective purchasers a unique opportunity to be close-in yet somewhat removed and secluded.
“It is exactly that sense which has encouraged me to write to you. No, my interest here is not your property. Instead my interest is the possible contacts or acquaintances you might have who may have suggested at some point that they too would be interested in a property like yours, if only the right one were available. Consequently, I submit to you the attached information about my listing at 14520 11th Avenue Court East.
“Despite what the media reports, buyers are still buying and sellers are still selling. In most cases, it’s simply a matter of finding the market. Originally licensed in 1972, I have been through markets like this before and I can assure you, it’s not all doom and gloom. For your convenience I’ve also enclosed information about myself.
“If you’re unaware of anyone who might enjoy and value my listing, I appreciate your consideration. However, if you have friends who would also like to deal with a professional and experienced Realtor in other matters, I would appreciate the referral. Again, I thank you for this opportunity to be of service to you.
“My warmest regards,
“Kenneth C. Thiemann, Assoc Broker / WA State Certified Appraiser
“Personal Cell Phone (253) 370-5626”
Along with the letter I am including information about myself and an informational flyer about the property.
Where many agents are simply interested in getting and maintaining more listings, I feel I am actually doing something positive to benefit the interests of my seller.
Anyway, thanks for dropping by and I hope you have a great day. Always remember to:
Do Good ….. BE GREAT ….. 110% …..
Thursday, February 14, 2008
Tuesday, February 12, 2008
Sales Still Happening - Home Ownership Benefits
Blog for 02-11-08
Although the market has slowed, it’s impossible to ignore the fact that homes and properties are still being sold and buyers are still buying. And no, no one appears to be stealing anything. No theft involved. Obviously there are still those who understand the benefits of home ownership.
Okay, let’s review. The benefits of home ownership include:
1. You have the choice to repaint the colors you like or relocate or enlarge rooms to make the space more pleasing and livable. Tenants are rarely given the option of making such changes.
2. With a fixed rate loan, it’s a guaranteed savings program. While very little is applied to principle initially, a portion of every payment represents debt reduction and, over time, it increases with each payment that is made. In a rental situation, a tenant pays rent and the landlord benefits from the debt reduction on his loan.
3. Over the long run, homes typically appreciate in value, typically at 2% -to- 3% annually. While the amount varies, over a period of 30 or 40 years, nearly every home in America has benefited from appreciation. In fact, in 1972, appreciation was considered a function of inflation. Regardless of the amount, appreciation or inflation will help to increase ones equity position. Simply put, equity can be defined as current value less mortgage balance owing. However, it is important to remember that when selling a property, ones equity is reduced by the selling costs applicable to that specific sale. I’ll try and address that more at a later time. Appreciation doesn’t apply to tenants.
4. And, speaking of inflation, the amount that one borrows to purchase a property today is typically repaid in dollars that are worth less as each successive payment is made. Rent is what it is; rent.
5. Although it will vary with each property owner, each will speak of an intrinsic value or security that property ownership provides. This is something very difficult to measure, but it always seems to exist. For my family, purchasing property in a specific location provided my children access to the schools we thought would give them the best education. Unknown to us at the time, it also gave them a great sense of worth because their parents were property owners. I’d like to see someone attempt to measure that benefit
Let’s talk more about appreciation or inflation. If one purchased a property with 100% financing and an interest only loan, the home would have to increase in value roughly 9.3% in order for the owner to breakeven upon its sale. Of course, that assumes that the owner would utilize the professional services of a Realtor. In the typical world, based on the typical appreciation or inflation, one would have to continue owing that property for at least three-to- four years in order to breakeven. This is important because there seems to be a lot of purchasers who believed their purchase today meant instantaneous profits tomorrow.
The point here is that purchasers were buying real estate, not for the benefits of owning that property, but instead because they believed that real estate was a certain means to instant riches. Fixers and foreclosures became the envy of every so called investor. Or, If only one could purchase a property with two lots from an unsuspecting seller so they could make a killing selling them separately in a simple legal procedure. Of course the market took a turn and many unsuspecting investors have been left holding an empty bag of equity. Many years ago I learned an important lesson; that you couldn’t eat equity; it simply didn’t provide the nourishment to sustain life. In that sense, until sold, equity was an intangible.
Speaking of homes with extra lots, I have a story. I’ve represented sellers twice where they legitimately had two lots that could be legally separated very easily and inexpensively. In the first case, the property owner was having great difficulty emotionally making the transition from one home to another. When I explained the benefits of separating the two lots and selling them individually for more money, he emphatically said that he didn’t want to deal with the bother or the strain. It was his choice and consequently a builder bought the property, split the lots, rented one and built a new home which was eventually sold on the other.
In the second instance, I informed my prospective seller that there was a definite benefit if he split the lots before we put them on the market. He followed my advice and his home was sold to one buyer and the vacant lot was sold to a different buyer who eventually built and sold a new home constructed on the vacant site. This is an important story because it goes to the matter of honesty and integrity; things which I have patterned my entire life around.
Obviously, there is continued vitality in property ownership. But we as Realtors need to go back to the basics and promote the greater values of property ownership rather than simply selling it as a quick and easy way to untold riches.
Throughout my blog today, I have mentioned Realtor, not real estate agent. This is an important distinction that very few Realtors make. In short a Realtor is one who has pledged to abide by a higher set of standards and ethical obligations than what is required by the state for other licensed agent. Therefore, as a Realtor, I’m better than a non Realtor agent. Plus Realtors, through their dues, work continuously to promote and protect the interests of property ownership.
Anyway, I’ve been busy; spending countless hours crafting words together hoping that a meaningful and striking mosaic would result. My goal has been and will continue to be to help my sellers sell their property and to provide my buyer clients the opportunity to purchase the homes and properties of their dreams.
Again, I thank everyone who has contacted me. I believe I have continued to be successful in responding to every one of you. And as your week continues, remember to always:
Do Good ….. BE GREAT ….. 110% …..
Although the market has slowed, it’s impossible to ignore the fact that homes and properties are still being sold and buyers are still buying. And no, no one appears to be stealing anything. No theft involved. Obviously there are still those who understand the benefits of home ownership.
Okay, let’s review. The benefits of home ownership include:
1. You have the choice to repaint the colors you like or relocate or enlarge rooms to make the space more pleasing and livable. Tenants are rarely given the option of making such changes.
2. With a fixed rate loan, it’s a guaranteed savings program. While very little is applied to principle initially, a portion of every payment represents debt reduction and, over time, it increases with each payment that is made. In a rental situation, a tenant pays rent and the landlord benefits from the debt reduction on his loan.
3. Over the long run, homes typically appreciate in value, typically at 2% -to- 3% annually. While the amount varies, over a period of 30 or 40 years, nearly every home in America has benefited from appreciation. In fact, in 1972, appreciation was considered a function of inflation. Regardless of the amount, appreciation or inflation will help to increase ones equity position. Simply put, equity can be defined as current value less mortgage balance owing. However, it is important to remember that when selling a property, ones equity is reduced by the selling costs applicable to that specific sale. I’ll try and address that more at a later time. Appreciation doesn’t apply to tenants.
4. And, speaking of inflation, the amount that one borrows to purchase a property today is typically repaid in dollars that are worth less as each successive payment is made. Rent is what it is; rent.
5. Although it will vary with each property owner, each will speak of an intrinsic value or security that property ownership provides. This is something very difficult to measure, but it always seems to exist. For my family, purchasing property in a specific location provided my children access to the schools we thought would give them the best education. Unknown to us at the time, it also gave them a great sense of worth because their parents were property owners. I’d like to see someone attempt to measure that benefit
Let’s talk more about appreciation or inflation. If one purchased a property with 100% financing and an interest only loan, the home would have to increase in value roughly 9.3% in order for the owner to breakeven upon its sale. Of course, that assumes that the owner would utilize the professional services of a Realtor. In the typical world, based on the typical appreciation or inflation, one would have to continue owing that property for at least three-to- four years in order to breakeven. This is important because there seems to be a lot of purchasers who believed their purchase today meant instantaneous profits tomorrow.
The point here is that purchasers were buying real estate, not for the benefits of owning that property, but instead because they believed that real estate was a certain means to instant riches. Fixers and foreclosures became the envy of every so called investor. Or, If only one could purchase a property with two lots from an unsuspecting seller so they could make a killing selling them separately in a simple legal procedure. Of course the market took a turn and many unsuspecting investors have been left holding an empty bag of equity. Many years ago I learned an important lesson; that you couldn’t eat equity; it simply didn’t provide the nourishment to sustain life. In that sense, until sold, equity was an intangible.
Speaking of homes with extra lots, I have a story. I’ve represented sellers twice where they legitimately had two lots that could be legally separated very easily and inexpensively. In the first case, the property owner was having great difficulty emotionally making the transition from one home to another. When I explained the benefits of separating the two lots and selling them individually for more money, he emphatically said that he didn’t want to deal with the bother or the strain. It was his choice and consequently a builder bought the property, split the lots, rented one and built a new home which was eventually sold on the other.
In the second instance, I informed my prospective seller that there was a definite benefit if he split the lots before we put them on the market. He followed my advice and his home was sold to one buyer and the vacant lot was sold to a different buyer who eventually built and sold a new home constructed on the vacant site. This is an important story because it goes to the matter of honesty and integrity; things which I have patterned my entire life around.
Obviously, there is continued vitality in property ownership. But we as Realtors need to go back to the basics and promote the greater values of property ownership rather than simply selling it as a quick and easy way to untold riches.
Throughout my blog today, I have mentioned Realtor, not real estate agent. This is an important distinction that very few Realtors make. In short a Realtor is one who has pledged to abide by a higher set of standards and ethical obligations than what is required by the state for other licensed agent. Therefore, as a Realtor, I’m better than a non Realtor agent. Plus Realtors, through their dues, work continuously to promote and protect the interests of property ownership.
Anyway, I’ve been busy; spending countless hours crafting words together hoping that a meaningful and striking mosaic would result. My goal has been and will continue to be to help my sellers sell their property and to provide my buyer clients the opportunity to purchase the homes and properties of their dreams.
Again, I thank everyone who has contacted me. I believe I have continued to be successful in responding to every one of you. And as your week continues, remember to always:
Do Good ….. BE GREAT ….. 110% …..
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