Housing slump, rising rates and weak sales, OH MY!

Hi everyone, this is my first post, so please bear with me, and BE KIND!

It seems to me that we, the real estate and mortgage industry, are getting battered at every turn. I believe that Chicken Little is alive and well at The Miami Herald, as well as other media outlets. Well, you know what, the sky is not falling! Briicell condo 1980's

I have been in this busines long enough to know that patience is a virtue and flexibility and creativity are survival skills! In the early 80's, the interest rates were at 15-18%, there was a huge condo glut, and there was no such thing as 100% financing. Heck, you couldn't even get 90% financing in many cases when it came to condos because the mortgage insurance companies came down hard on So Florida. Some actually packed up and got the heck out of Dodge! In spite of this horrible scenario, people were still buying homes, seller's were still selling, and business was still plugging along.

I want to talk about different ideas that you can use to set your client's property apart from the rest. It isn't always about the price!. Price reductions are great, but how is that going to solve the problem for the buyer who is short on cash anyway! A 5 or $10,000 price reduction doesn't put any more cash in their pocket for closing costs or down payment.

For example, let's say that you have a home or condo listed at $500,000. You have 10 other properties in the immediate area selling between 450,000 to 515,000. Your showings are slowing down and it's time to have that conversation with your client about a price reduction! Your seller agreed to lower the price by $30,000. His gross proceeds are now $470,000. But what if you proposed that your client paid up to 30,000 ( 6% of purchase price) in incentive for the buyer?

WHAT! $30,000 IN CLOSING COSTS, WHY THAT'S OUTRAGEOUS! I suppose that yes, it would be. But what if it wasn't all for closing costs? What if that 30,000 included the condo association fee for 1 year. What if it included a tempor mortgage cartoon ary buy down on the buyer's interest rate for up to 3 yrs?

What if it included prepaying property taxes for one year?

You would be surprised how these things can swing the deal in your favor when buyers are comparing properties! You're client loses nothing at all, the $$ to him is the same and you have clinched the deal.

So, think outside the box and use new ideas!

That's how we survive the GREAT HOUSING SLUMP OF 2007!

Posted Friday Jul 20

(07/20/07 11:47AM) — Teri Eckholm, Realtor® Anoka County MN

Arlyn--Good first post and welcome to the Rain! I like your thinking! It is imperative to think outside the box in this market!

(07/20/07 11:55AM) — Arlyn Mendoza

Thanks Teri! I figure every deal is like a puzzle, you just gotta make it fit! and thanks for the welcome!

(07/20/07 12:24PM) — Palmetto Bay | Redland Real Estate | Maggie Dokic

Arlyn, fabulous post. I think you've been closet blogging before this one. ROFL You're off and running, girl! Welcome to the Rain. You're a natural at this and I see you're going to like it here very much.

Apart from that, your content is so timely. I am going to put my creative thinking cap on and come up with something new for my sellers using your suggestions. Way to go!

(07/20/07 12:36PM) — Missy Caulk Ann Arbor Realtor Ann Arbor Real Estate

Arlyn, welcome to Activerain. We look forward to hearing from you. You are already using graphics. Wow, it took me months to figure all this out !!

(07/20/07 12:37PM) — Celeste "SALLY" Cheeseman (RA), e-PRO HAWAII Real Estate & HAWAII Relocation

Wow...you'll do just fine! Welcome and have fun!

(07/20/07 12:55PM) — Randy L. Prothero - Hawaii REALTOR®

I have a listing in a community with too much inventory. No agent showings in the last two weeks. My client asked if was time to lower the price. Instead I suggested to raise the cooperating brokers commission. I got two phone calls last night for showings right after making that adjustment, with the same sell price.

(07/20/07 01:00PM) — Arlyn Mendoza

Thanks guys! I need all the encouragement I can get!

Now let's all get creative and make some deals!!!

(07/20/07 01:02PM) — Arlyn Mendoza

That's exactly what I'm talking about Randy! You didn't have to lower the price,and I bet the neighbors will thank you later for not lowering the bar on community!

(07/20/07 02:48PM) — Beth Butler

You go girl - congrats on your first post!

(07/20/07 04:31PM) — Stephanie Edwards-Musa, Realtor ® The Woodlands, TX Real Estate

Arlyn, great post! Welcome to ActiveRain! It looks like you will have a lot to share with the community.

(07/20/07 04:55PM) — George Souto

Arlyn, first of all WELCOME to ActiveRain, and I hope you will enjoy it here. Second, those are a great list of very creative idea's, more people in this industry need to think out of the box like that.

(07/20/07 05:20PM) — Bob Carney Licensed MD/PA Real Estate Agent

Welcome and pretty good post for just being your first...I hope Maggie's not a bad influence on you.

(07/20/07 05:34PM) — Real Estate Specialist | Brandon, FL | Susie Roscoe

Arlyn...You're a NATURAL!!! Welcome to the RAINY-DAY-FUN with Maggie and friends!! She must have coached you good to "start with" this blog!!! Wow!!

(07/20/07 06:02PM) — Arlyn Mendoza

Susie and Bob- Maggie is FABULOUS!!!! i would not have ventured here without her encouragement! Thank you for reading my post!

thanks George! Every now and then I have a good idea,now Ihave lots of people to share them with!

thanks Beth! I'm looking forward to many more posts and maybe encouragins a few others in the SM office to join up!

Hi Stephanie, my nephew just moved to TX! thanks for the thumbs up from the Lone Star State!

(07/20/07 07:52PM) — Rita Taylor | Sanford NC Real Estate & Homes for Sale in Sanford North Carolina

Arlyn,

Very good first post - I would have guessed you have been doing this a while. Great idea to use incentives instead of a price reduction.

(07/20/07 08:32PM) — Indianapolis Real Estate | Paula Henry

Arlyn - I totally agree with you. After talking to a seller recently, he wanted to offer more money for the co-broke. I recommended we contribute 3% toward closing costs. The home sold within two weeks. Buyer incentives work! Welcome to the rain!

(07/20/07 08:47PM) — Pasadena CA Real Estate - Irina Netchaev

Arlyn, welcome to Active Rain. What a great first post!!! Creativity IS the key to survival. Excellent tips and suggestions!!!

(07/21/07 12:23AM) — Central Oregon Real Estate | Thesa Chambers, Broker

Maggie said you were a natural - boy was she right... this is great! Welcome to ActiveRain

(07/21/07 01:06AM) — Orange Co. Real Estate~Lynda Eisenmann, Broker-Owner, CRS,CRB,GRI,SRES, Brea, CA

Arlyn,

Wow, what a great job! So well done thanks for sharing the info.

(07/21/07 09:58AM) — Arlyn Mendoza

Rita, Paula, Irina, thesa and Lynda.... Thanks for your comments!

Paula, I'd love to hear other strategies that have worked for you also! Agents and lenders have to work together at the inception of the deal b/cause you usually don't write a contract unless you know you have a qualified buyer! Right?

I'd love to hear from all of you of different scenarios that have worked for you!

thanks again!

(07/21/07 11:17AM) — Scott Dovala Santa Rosa Mortgage and Home Loans

Arlyn,

Welcom to Activerain. this was a good first post. you will certainly ejoy the company here.

(07/21/07 01:15PM) — Kathy "Kat" DeLong, REALTOR

And the award goes to ARLYN for her first GREAT post! ...and many more to come.

(07/21/07 04:59PM) — Esko Kiuru - Las Vegas NV Mortgage Consultant

Arlyn,

Great first post. Welcome to AR. That's the way to move property. Be creative, come up with new ideas to make the house marketable. As usual, many people are a little short on down payment, so your ideas are perfect solutions for them. I vaguely remember the early 80's, it was downright ugly then. But the market always recovers.

(07/21/07 06:04PM) — Chris Tesch College Station, Texas Real Estate

Arlyn,

Welcome! You really are a natural, just like Maggie said!!! Great article

(07/21/07 07:55PM) — Clearwater Real Estate Clearwater Beach Condos & Homes for Sale- Cyndee Haydon

Arlyn, Welcome to Active Rain - like so many others have said - you ARE a natural - looking forward to hearing more from you! You're got a great friend in Maggie too!!