Andrew Baumbach Greater Milwaukee Real Estate

I am an avid sports fan and when driving around mostly listen to sports radio. I know this is not the only station or medium that is used for advertising, but everyday i hear and ad spot of how luctrative it is for people to buy these foreclosure properties. The ad usually features 2 women talking about one of the friends new home that costs less than the other is paying for rent. I really do not have a problem with this part at all.

The advertisment is for a company that sells a lists of foreclosure homes in a specified area. This is what i have a problem with. You see, I have actually seen these lists and checked them against my local MLS. Yes, that's right. All the foreclosure properties on this list are actually listed with Realtors® and are available at no cost if you would simply contact a Realtor® from the get go.and that still is not my biggest problem with these compaines.

As I just stated i checked the status of alot of the properties on these lists and they are far from current. In fact close to half of the properties that they had advertised as available were either sold weeks to months ago or were already in the Pending process. They are charging for information that is not even current, and yet charging you as if they have all these amazing properties for sale wehnin fact they are long gone.

If you a consumer looking to take advantage of this part of the market here is some advice from someone on the inside.

Contact a Realtor® that has experience helping buyers purchase these kind of properties. you see folks the banks now if they want to sell a property for the most amount of $$$ in the least amount of time that need to list with Realtors®. A Realtor® has access to all available homes including foreclosures that they will provide to you at no cost.

Now here is the part that most people run into problems. Some of these properties may not be elgible for financing. they may be in good locations but if things like the roof, or furnace need to be replaced. Most lender will not back the mortgage. Also there are many investors in the market that are buying with cash in hand and willing and able to close fast.

This is where it will help you again to ire a buyer's agent to represent you so you will be assured the best information and advice available to you.

I hope this message finds you well and hope that it can of help to you, your family and friends, as I encourage you to pass it along to anyone that is thinking of buying.

Yesterday was a very important meeting at the NAR Real Estate Summit in
Washington. The following is an excerpt from that meeting:

"Secretary Donovan (secretary of the U.S. Department of Housing and
Urban Development) said that important changes, which the National
Association of Realtors® has been calling for, will help consumers
purchase a home. "We all want to enable FHA consumers to access the home
buyer tax credit funds when they close on their home loans so that the
cash can be used as a downpayment," Donovan said. According to Donovan,
the FHA's approved lenders will be permitted to "monetize" the tax
credit through short-term bridge loans. This will allow eligible home
buyers to access the funds immediately at the closing table."

What does this mean for you? First Time Buyers may in fact be able to
benefit from an up and coming change in the way the $8,000 tax credit is
used for the purpose of purchasing a home. We just may see the chance
for a borrower to use the $8,000 at the point of sale!!!

More to come, please stay tuned...

AND: please call me if you have any questions!!! I love talking about real estate.

I was writing a blog earlier about meeting with a prospective seller that believed his chances were better of saving money with a Flat Fee, MLS only agent vs. going with a full service agent.

This got me thinking of the true stats that these companies actually delivered and I wanted to share them here.

This is a study of the top 3 Flat Fee providers in Milwaukee WI

Milwaukee Area Flat Fee service Stats

I will not include any names here.

This is based on the #1 flat fee in our area.

380 homes listed

59 Sold

only 15.5% actually sold

Of those that were lucky enough to get an offer the average sold price was 8% lower than the asking price.

This is from the #2 Flat Fee only company

100 homes listed

16 sold

Only 16% actually sold

Of those that were lucky enough to get an offer the average sold price was 5.4% lower than the asking price. the average in our MLS sold for 95.2%.

This last companies very well known and offer an Ala carte service where you can add more services later if you wish. You may have seen their magazines.

138 homes Listed

41 Sold

29% Actually Sold

Of those that were lucky enough to get an offer the average sold price was 4.5% lower than the asking price.

I attribute this to the customers that actually stayed with this company and eventually opted for more services(which usually costs more in the end than listing with a full service agent from the get go) vs, the majority who felt like the were handed the old bait an switch and went off to list with a real full service agent.

The important thing to note is all of these companies charge an up-front fee of at least $400. For some companies this can be quite lucrative, because all they provide is MLS access. In honesty they could really care if the home sells or not, since there is no incentive for them. In fact if your home does not sell and you re-list with them would be even better since you will be paying them again, and they can keep their sign in your yard and they can continue to receive buyer calls where they can show and sell buyers other homes than yours, where they can actually make an average commission. (Not all Flat Fee Companies advertise their numbers or operate this way but many do)

If you are just testing the waters, and are not committed to selling and live with a 16% of selling your home while you have to do more leg work this might be the best route to go. But be advised the buyers and agents viewing your home know you are not paying the other half of commission and thus is usually deducted from the offer to purchase. All this extra work you are doing and money you are trying to save is going right to the buyer.

If you are serious about selling, contact a full service agent like myself that can show you how full representation can work to your advantage. Because 90% of our listings sell and we average 98.7% of list to sales price.

It might be hard to say that the market is rebounding for sure from the real estate recession but it sure has taking a bounce. either way this really is not the year for buyers to be waiting on the sidelines.

Now that the stimulus has been finalized and the 1st time home buyer tax credit has been offered the phones are starting to buzz quite a bit more in my office and i am expecting quite a bit more as the word gets out.

For those of you buyers out there with steady jobs that really have a low probability of going away, you really can't wait. the rates are amazingly low, and from what i am hearing from most mortgage pros really can't and won't get any better from where they are now. That and a good amount of selection really will go along way. As a buyer the chances of getting into a bidding war on a home are a great deal slimmer, and the prices are at the point where a lot of buyers were looking for years ago. That's right, if you missed the boat before, it's you're time to take advantage now.

As for my report from the trenches; I am seeing and meeting a lot of folks that are now starting to get off the fence and make the move to home ownership, and I have to say that i am seeing prices holding steady and less and less foreclosure homes for sale in desirable areas, and if they do become available there is almost always a bidding war. most recently in fact an associate of mine had some clients that wrote 15k above and still received a rejected offer.

also i am beginning to see new pre-owned homes coming on the market at higher prices than we have seen through the winter are at a hold steady prices. Meaning that the prices really are or will not go down much further besides the occasional fire sale price set by some seller that are looking for bidding wars and fast sales. Hence the bounce. And the sold prices are going up as well.

if you're going by what you see in the headlines of the media you are being mislead. Real estate is very local. And the national stats they usually post are very misleading yet are very effective at getting ratings or selling papers. do your self and decide for yourself if owning would be a better option than renting, and in most cases it always is.

for those of you with homes looking to make a move...look at this logically. obviously you are not going to clear what you wanted but when you make that move up purchase and sell later, it is almost impossible to lose out and on fact you stand a very strong chance of coming out ahead if and when you stay in your home for more than more than 3 years without a re-fi.

none the less how many stimulus packages are we going to see for this industry? If you were waiting for the bottom it's gone, don't miss your chance now. I'm happy to help.

Driving around town lately I have been seeing a by owner company advertising on billboards with the headline "Now more than Ever". I could not help but to think to myself that they are exactly right, but not in their favor.

In a tough, buyers market does it really make sense do have less service? Or to pay a fee to a company that could care less if your home sells or not? Or for that matter does it even make sense to hire an agent for a discounted fee, knowing that they will not be giving you a full service package?

The fact of the matter is that most sellers, think what an agent charges will come out of what they will net, without weighing how much it could really cost them by not using a good full service agent. I understand this may sound confusing but I will explain.

Let me put into another context if you were going to buy a new printer and there were 2similar ones for sale, one for 200 and the other for 350. Most would opt for the 200 printer. But what if you found out the 200 printer uses more ink and the replacement cartridges cost $20 more than the 350 model. You can see you may have paid less up front but in the end it really cost you more.

Now more than ever good agents are continuosly honing thier skills and using every tool available to get as much exposure to get their listings sold.

Can folks really afford to have limited exposure, less information, and less representation? Every year around this time of year we start seeing what the median sales price for agent assisted sales compared to FSBO sales. These studies consistently come show that FSBO homes sell from 16%-30% less than Agent assisted sales. To further put this into context in my market, per the MLS the average home sold for 95.20% of List to Sales price. not too shabby right? I studied my numbers in comparison to that and found my listings sold for over 98%.

My point is that I totally understand someone wanting to try and saving some money, and I absolutely believe it is possible to sell a home without an agent, but what you save and what it cost you will not be the same.