Gene Perez Your Real Estate Consultant, Santa Maria Homes: December 2009

Every one has temptations that we must contend with everyday, and I am not talking about the personal ones Tiger Woods succumbed to, there are already enough blogs on that. I am referring to temptations that every Realtor must face on their road to a successful real estate career.

Inspired by The Five Temptations of a CEO by Patrick Lencioni, here is my take on The Five Temptations of a Realtor. 

TEMPTATION #1- Choosing Status Over Results

Park benches and grocery carts might love your mug shot, but that does not mean you are producing results. Many Realtors base their success on their perceived status in the real estate community. Thousands of dollars are spent on ego "branding" with very little thought into what is actually producing results. Take a look at a Realtor's website and when you see it is all about them, it is a good sign the Realtor has fallen into this temptation.

ActiveRain member Jeani Thomas Ritchie in her recent featured AR blog, "I got the job because it wasn't all about me!" gave a good example of results over status:

"I will be listing my property with you and I just want to tell you that the thing that impressed me most about you was that it wasn't "all about you" you really came in and answered my concerns, told me the truth and offered solutions to my problems."

Question: Would it bother you greatly if you exceeded your objectives in business, yet remained anonymous relative to your peers in the industry?

TEMPTATION #2- Choosing Popularity Over Accountability

Remember High School and the popularity contests? Well, things did not change much when you decided to join the real estate industry. Even Active Rain has the "in crowd", it's not a bad thing, it's just natural. BUT, we should still have a sense of accountability to provide helpful contributions to the AR community rather than just do "drive by" comments and post useless blogs.

Accountability over popularity also means sticking to your morals and ethics regardless of the situation and how much money is at stake and holding others you do business with to the our ethical obligations. This can be difficult in a community of Realtors where we rely on strong networks and friendships among our peers. 

"The slightest reluctance to hold someone accountable for their behaviors and results can cause an avalanche of negative reaction from others..." The Five Temptations of a CEO

Question: Do you find yourself reluctant to question a Realtor you are doing business with on a seemingly obvious ethical violation?

TEMPTATION #3- Choosing Certainty Over Clarity

Realtors are having a hard time defining their vision in a changing a market because they are afraid to be wrong. You can not hold yourself accountable without have clarity in your mission statement and business plan, even if the future of the market is uncertain. Realtors slipped out of the market these past two years, mostly because of an unclear vision and business plan, not because of the market changing. The market shifted, but Realtors where not clear which way to go. Do you think Gary Keller's book Shift has become a best seller by accident? (Here is a good review of Shift by ActiveRain member Renee Burrows)

Realtors need clarity of vision in a market that is shifting and uncertain...even at the risk of being wrong.

"I'll take a well executing company over a visionary one any day." The Five Temptations of a CEO

Question: Do you prefer to wait for more information rather than making a decision without all the facts?

TEMPTATION #4- Choosing Harmony Over Productive Conflict

It would be nice if every real estate transaction was pleasant and enjoyable. They aren't. Some are just downright difficult where you face resolving difficult issues with difficult clients and Realtors. 

People hate conflict. Since Realtors are people, despite what some would say, they generally despise conflict too. Why do you think Realtors not answering phone calls has become such a hot topic? It is not because they are too busy. Let's get real. It's because they do not want to be bothered with conflict and problems that today's market presents.  By avoiding problems and procrastinating issues, deals will be lost along with the reputation and trust of the real estate community.

Conflict can also come in the form of disagreement such as disagreeing on contract terms, price, repairs requests, etc. Real estate professionals are in the business of conflict and must understand the importance of it in business.

"Even if we are not overly concerned about being liked by our people, we fail to hold them accountable because we don't feel it's fair to hold them accountable, which has something to do with Temptation #1." The Five Temptations of a CEO

Question: Do you avoid answering phone calls from difficult clients and Realtors involved in a difficult transaction?

TEMPTATION #5- Choosing Invulnerability Over Trust

Do you hate being wrong? Most people do. Being wrong shows you are weak. Many Realtors fear they will expose a weakness if they are wrong in pricing the house, showing the house, or negotiating a transaction. Truth is, maybe you did price the house wrong, or perhaps you should have negotiated differently. Maybe you don't have new business because you are a weak lead generator and have poor marketing skills? Instead of blaming the market and outside forces for your failure, own your weaknesses and trust others to help you strengthen them.

Wouldn't it be great of the AR community could embrace this and learn to trust one another with our failures and shortcomings? 

"Sometimes it is even okay to be burned, because you realize it's not fatal." The Five Temptations of a CEO

Question: Do you fear being wrong will cost you future business?

Hope that helps! Here's to conquering your Temptations in 2010!

 

 

 

 

 

 

So, you have been unemployed for 2 or 3 months now. Or you may have just received news that your position will be eliminated after the New Year. What should you do?

Many households exist without a BUDGET. Money comes in, money goes out - sometimes thousands of dollars exchange hands in a single month with nothing to show for. Names were left off to protect the innocent. Then, there are some households who "think" they have a budget, but never really respect/ abide by it.

When families run into financial difficulties, some may have depleted their savings, tapped into retirement savings and even ask for families to help.

One very stark observation is that families never get on EMERGENCY mode - ie. changing their lifestyles to adjust to the new financial environment.

One thing I constantly hear, "I'm just holding out waiting for God to turn things around. I know it will happen. It will happen real SOON." So, they go on living the next few months as if things will continue to be the same because "God's going to continue to bless me" mentality.

Now, before you get upset, don't get me wrong. I love God with all my heart. I believe in the power of prayers and I believe that God could turn things around for anyone in an instant. But I don't believe God wants us to live in denial.

 

As a good steward of your finances, whether or not you receive the BAD NEWS, a household NEED to have a Financial Plan B and Emergency Plan C.

Your Financial Plan A is the "currnet" lifestyle you live with the current income you can support your lifestyle with. You must have a Basic Budget.

Your Financial Plan B is when you receive the BAD NEWS. You may need to evaluate what are the lifestyles and expenses you need to cut out. Some examples may include: Manicure/ Pedicure, going out to restaurants to eat, Christmas or vacations, Starbucks, dry cleaning, services for conveniences such as lawn care, shopping and unplanned grocery trips. You may also want to consider trimming back your TV cable services, your cellphone services - Unlimited plans, etc. (You would think these are easy to understand, but you'd be surprised how many don't go in this mode).

Your Financial Plan C is when you need to make drastic measures for basic survival. First, you make sure you have your Basic 4 walls taken care of. This includes your rent or mortgage, your transportation, your food, clothing and utilities. Over and above these necesseties, you make a priority list of what needs to be paid. The word here is "EMERGENCY". Your job is to stretch your financials coming in for as long as you could.

The final and drastic measure would be to consider selling your cars and your home. No one wants to come to this point. But if you do, you may need to get yourself financially and emotionally ready to take on this step.

The biggest problem is that unemployment income was never enough to sustain a household's current income. Yet, families fail to make necessary adjustments for the transition. What they believe is that this is temporary. It is TEMPORARY but TEMPORARY for some, maybe be 2 months, temporary for some could be 18 months or longer.The problem is also to find the position that pays the same to continue living the current lifestyle. Most people have to take 1/3 in pay cut to be in the same position they were in.

The saddest part is that at the beginning, people live and spend as if bad things won't happen. Before you know it, families are in turmoil, emotions are high and divorce is in the picture.

These are REAL for many families. Don't be another statistic. Just like any business practise a Fire Escape plan, you owe it to your family to create a Financial Escape plan. You don't ever have to execute it. But if you do, you have one less thing to worry about.

A business would not go into the following year without a Financial Budget. Why should your household be any different?

 

Question of the Week:

WOULD YOU FIRE YOU If YOU WERE HIRED TO MANAGE YOUR FINANCES?

 

 

If you need a simple Financial Budget to begin your planning, find it here on Budget in pdf format.

The Equity sheet (pdf format) is to see how much you are worth.

 

PS: I'm sorry that I felt compelled to talk about this right before Christmas. Some financial damages may have been done. But there is still time to correct the problem. I rather plant this in your mind before the holidays, rather than to throw a bombshell at you after the New Year. Too many families have "Christmas" with no budget only to find "surprises" on their credit card bills in January and February.

 

 

Related Articles:

• When Finance is More Than Head Knowledge
• The Real Hard Truth about Homeownership
• Time Value of Money in Closing Costs
• Unconventional Financial Advice for Newly Weds
• Can Dave Ramsey Principles Work for All America?

 

 

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Subscribe via Email if you are not an Active Rain member here.

 

Contact:

Loreena Yeo
Frisco TX Realtor® / Broker of 3:16 team REALTY
(214) 783-2210
loreena@loreenayeo.com

Check out my Frisco TX Homes website.
The premier greater Frisco TX Homes local informational center for your one-stop real estate needs.

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Super-serving Frisco, Plano, Dallas, McKinney, Allen, Little Elm, Prosper, Celina, Richardson, Dallas M-Streets,
Dallas White Rock Lake area communities and other surrounding areas.

 

Copyright © 2009 by Loreena Yeo (3:16 team REALTY)
Originally Posted on Every Household Needs a Plan B. Sometimes Plan C too.

Beginning January 1^stthe new and improved Good Faith Estimate (GFE) will be required for all mortgages. What does this mean to you the consumer? It means you will be confused like never before.

That's not the intent behind the new disclosure. Indeed our government spent upwards of 7 years researching and perfecting a form that would make shopping for a mortgage as transparent as possible. As they say the road to hell is paved with good intentions; and although this new disclosure is intended on improving consumer's understanding of the loan they are applying for, it falls woefully short.

So why is this new GFE so bad? Let's start with the fact you are never disclosed your total monthly payment. Worse yet, you are never disclosed how much cash you will need to complete the transaction. The form simply addresses information pertaining to the mortgage loan, and does NOT even provide for discussion of your taxes, insurance or other costs.

The new form also requires lenders to commit up front to the total they will charge you. A great idea you say? Yes, except the requirement is so draconian that lenders are now forced to disclose the worst case scenario, before they may know all the particulars of your loan. Would you like to guess how many lenders will drop their fees once your scenario doesn't play out as bad as expected? This will certainly result in borrowers actually paying more costs for loans, regardless of how hard they shop.

Let's look at an example. Say you are refinancing and are unsure what your home is worth (does anyone know what their home is worth anymore?) and when the appraisal comes in it's a bit short of the value you needed. The lender will be charged "loan level price adjustments" accordingly but unless he disclosed these costs he can't pass them on to you.  This requires the lender to price that adjustment on any loan he MIGHT have to pay it on, which in turn means you will have to hope he is honest enough to drop the cost if it doesn't apply. Most lenders will be honest enough to do the right thing, but you don't need protection from them. An unscrupulous lender will have every chance to overcharge you for a loan, and that's what these disclosures should prevent.

The bottom line is you can't legislate morality. Know who your lender is and get references from past customers and industry professionals. An ethical, knowledgeable lender working with you to accomplish your goals can make all the difference between a good deal and a rip off. Shop for your loan, but shop for your lender just as hard!

 

One Of God's Greatest Gifts / The Ability To Fail Like A Moron 

After my last post this seems appropriate again. We can't survive or strive if we let the short sighted among us deyne us the right to fail, because failure is the opposite side of the success coin! You simply can't have one with out the other.

Being empty nester's, Brenda and I more often than not watch the news during dinner, some days we make the mistake of paying to much attention. We heard that home owners never knew they had to make their payments and there ought to be a new law to protect them. Then they were interviewing high school students who had obviously not been allowed to fail, but socially promoted. Functional morons.

What about the poor morons?Then I remember that it had been suggested that Loan Originators should have kept these morons from these terrible loans. But, for more than three decades we've had civil rights laws that strive to take discrimination out of lending! Also in the name of civil rights we've developed the greatest opportunity for home ownership known to man!

The opportunities/the tools, were the very things that they would have the Loan Originators selectively discriminate the morons from! The only legal way to protects morons is to deny everyone the programs that helped so many.

What about the poor morons, they are not to stupid to get an attorney or call the state or the FTC and complain if they think you've keep them from a loan or home they qualified for. They would be in the right!

We could rewrite the law, that's easy! But, what about the overwhelming majority that use the same programs and succeeded?

Let's put this in a different perspective,  Brilliant Little Janie is now in school, many students fail in school! Because of her carrying parents, she does well, maybe failure just isn't in her genes. Sitting next to her in first grade is Little Johnny Moron, who's parents don't care. Little Johnny is going to fail first grade. It's hurts to be called a failure! It hurts to fail. So we pass a law restricting what can be taught to first graders, so that even the Moron's kids can't fail.

The Moron's mother likes the new law, her kid can't fail. But, what about Little Jannie parents? Their daughter was going to succeed beyond their wildest dreams, but now to insure that the Moron's kids pass Little Jannie can't be challenged. She can't have the opportunity to succeed because Little Johnny Moron can be allowed to fail.

Failure is one of God's greatest gifts. Failure inspires great men and women! Failure empowers people knowing you can survive failure is one of mankind's most important asset. Failure can trap some, but they were already doomed, not everyone can succeed. Would you really limit Little Janie and everyone else to protect Little Johnny's feelings? Really?

Would you over turn 148 years of progress and the great accomplishments of the last 30 years, to keep a few from failing? Really?

Are you the one to decided who deserves a home of their own?

Everyone deserves the opportunity to fail! God gave mankind freewill knowing that we'd become sinners. Of what value would life be without the opportunity for personal success? Those that believe "it takes a village" see others as nothing more than swine in a sty!

Those that say there ought to be a law, forget there already is! If laws are broken then I suggest we try enforcing the existing ones before we further restrict everyone!

Bill

PS: I used much of this in an answer to a comment on: Why Are We Calling Lenders Predatory

Bill

William J Archambault Jr

The Real Estate Investment Institute

wja@reii.org  832-259-7078 or 702-516-1569

             

From my past: GRI 1975, FLI 1974, Catalyst from a client 1974 an agent that makes things happen, REII, The Real Estate Investment Institute 1995.

©William J Archambault Jr ©The Real Estate Investment Institute ©REII

Today Fannie Mae released Automated Underwriting (DU) Version 8.0 and these changes are bound to have a big impact especially on multi-family houses.  Some of the changes included in this release are as follows:

• Minimum FICO score 620 (was 580)
• 2 Unit Owner Occupied Property - maximum LTV 80% for purchase & rate/term refinance (was 90%)
• 2 Unit Owner Occupied Property - maximum LTV 75% for cash out refinance (was 85%)
• 2 Unit Investment Property - maximum LTV 75% for purchase & rate/term refinance (was 80%)
• Unit Investment Property - maximum LTV 70% for cash out refinance (was 75%)

In addition to the eligibility changes listed above, the updated version (DU 8.0) will limit the maximum allowable total expense ratio to 45 percent, with flexibilities offered up to 50 percent for certain loan case files with strong compensating factors.

If current debts exceed the maximum allowable total expense ratio, the loan case file will receive an Ineligible recommendation. DU will no longer return a Refer recommendation on loan case files that would have otherwise received an Approval, but had exceeded the maximum allowable total expense ratio.

All new cases submitted to DU will now be scored with the 8.0 version and the new eligibility will be applied. New cases submitted prior to today will be scored with the current version DU 7.1 and will continue to score as DU 7.1 on subsequent submissions, however, loans using DU version 7.1 must close by February 12, 2010.

I would STRONGLY recommend that if you have run a Borrowers file through DU before today, and received an Approved/Eligible, but the Borrower has not gone under contract yet, that you run it through DU again.  I am sure that there will be many Borrowers that received an Approved Eligible under version 7.1, that will no longer receive an Approved/Eligible under version 8.  It would be a shame to have a Realtor that you partner with run around trying to find one of their Buyers a house, and the Buyer no longer qualifies.

If you are a Realtor or a Buyer I would again STRONGLY recommend that you contact the Loan Officer or Broker that you are working with and ask them to run your file(s) through DU to make sure that you have not been affected by this change. 

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, andConventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Have you read this article yet? It was featured in Business Week.  My first thought, wow! what a blunt and harsh statement! But the writer, Mark Roth, uses this headturning title to get your attention to make excellent points for those who are on the fence.  Namely that interest rates are at an all time low, in fact, the lowest in 40 years. He noted that in the late 70s, rates hit a high of 18%! Can you even imagine buying a house at 18%?  I personally can't fathom it as I bought my first house with an FHA loan while I was in college for 7% in 2001.  In the 80s, when rates dropped from 12% to 9%, my parents practically danced their way to the 1^st refinance of their home.  Generation X'ers probably would never dream of purchasing a home above 7% given all we have ever known are super low rates hovering between 5-6%. Mr. Roth points out the history of previous interest rates as well as the impact of rates on one's purchasing power. I happen to agree with his prediction that as the economy becomes more stable, interest rates WILL rise to hedge inflation.  My prediction has been that by this time next year, rates will have risen 1-2% at a minimum.

In Charleston, the average sale is $250,000. Assuming a 5% down payment at 5% interest on a 30 year fixed, your monthly principal and interest payment would be $1275.  If rates rise to 7%, your payment increases to $1580/month.  Some buyers may be on the fence because they fear prices may drop further. Consider this. If there is a 10% decrease in price and the $250,000 falls to $225,000 in one year, but you wait to purchase and the interest rate rises to 7%, your payment will be $1422.  You spend more money per month plus at the higher interest rate, you pay more interest over the life of the loan.  Real estate appreciation is always a cycle and as the economy stabilizes, values will level out.  Steve Harney is already analyzing data this is happening in many markets and that this will occur by 2014 in many states. Making a home purchase is still a decision that should be weight carefully and is not for everyone.  One important consideration will depend on how long you plan to stay in the home.   

Mark Roth summed up the article, "What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime."

The Charleston Relocation Experts team specializes in helping families make good decisions.  We do NOT think you are stupid or broke if you don't buy a house right now.  But if you are considering purchasing a home and would like a FREE consultation, we'd love to sit down with you and help you weigh your options and direct you to a qualified, caring mortgage professional that will help you with the numbers. 

Follow us on Facebook at www.facebook.com/CRETeam

We are approved by Boeing 3^rd party relocation company as Charleston Boeing Relocation Specialists with Carolina One Real Estate in Charleston, SC.  Visit us at www.CharlestonBoeingRealtors.com. Contact Top Real Estate Agents, North Charleston, SC Relocation Experts,  Licensed Realtors® in South Carolina at 843-849-5217 or info@CharlestonRelocationExperts.com to list your home for sale or to purchase a home in Charleston, Goose Creek, Summerville, North Charleston, Hanahan, Mount Pleasant and the surrounding areas in Charleston County, Berkeley County or Dorchester County. The Charleston Relocation Experts Team specializes in relocations, first time homebuyers and creating marketing exposure to sell your home in the Charleston SC Real Estate market. View all homes for sale at www.myCharlestonMLS.com

 

Michele Reneau, ABR, GRI, CRS

www.CharlestonRelocationExperts.com

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WHAT'S "CO-BROKE" AND WHY IT SHOULDN'T MATTER TO YOU AS A BUYER

In a nutshell, "co-broke" is the amount of compensation the buyer agent receives in order to sell you a home (please be advised that this pertains to Florida and Highlands County in particular).

At the time of listing, the listing agent and the seller agree upon the amount of money the listing agent is to receive at the time of closing. The amount , called commission, is usually a percentage of the final sale price. The commission is part of the listing agreement. In order to put a listing  in the MLS, the listing agent has to offer a share of his or her commission to the agent that ends up selling the home (buyer agent, selling agent etc.). This is called "co-broke". Co-broke is usually a percentage amount of the total commission the listing agent receives: Example: the listing agent receives x% and offers the selling agent half of x%. It's a 50/50 split but it doesn't have to be.  The listing agent doesn't state his own commission but has to input in the MLS how much co-broke is being offered for the listing.

Your buyer agent is being paid out of the listing agent's commission. The amount does vary depending on the co-broke being offered and the final sale price.

So, let's say you are looking for a 2 bedroom, 2 bathroom, 2 car garage home in a golfing community in Sebring. Your price range is $100,000 to $150,000. The home shouldn't be older than 10 years and you would prefer golf course view but it's not a "must".

We will search the MLS using the following criteria: Sebring, 2 bedroom, 2 bathroom, 2 car garage, $100,000 - $150,000, built after 1999, golf course frontage yes and no, and we will add the legal description of all golfing communities in Sebring. This results in a list of homes that meet all your wants and needs. Together, we will now eliminate all the homes that are not of interest to you. Once you have found several homes that you would like to view, we contact the listing office and make arrangements for a private showing at your convenience. At that point in time, we also to begin to evaluate the asking price on these homes to help you make an informed decision when it comes time to write an offer. We don't want you to pay more than you have to.

The amount of co-broke being offered for each individual listing is NOT a criteria we use when we initially search the MLS for you. We do not withhold any listings from you because it is listed with another office or because the co-broke is not high enough. We don't withhold any listings from you, period.

Even though you know now what "co-broke" is, it shouldn't matter to you and most importantly, it shouldn't matter to your agent either!

ON EDIT: to clarify, my point is that no buyer agent should withhold listings from their clients because the co-broke doesn't fit the buyer agent's needs. It happens all the time and the buyer doesn't even get the change to offer up the difference as posted in the replies below.
Percentage figures used above have been changed from numbers to letters.

If you are looking to purchase real estate in Highlands County and would like to have access to ALL listings, regardless of the co-broke, give us a call!

Andrea of Darrin & Andrea Mills
ERA Advantage Realty

www.millsrealestate.net
www.sellmysebringhome.com
www.findmysebringhome.com