Stu Barnes

Location, Location, Location!! That is and always will be the golden rule...or phrase that is always proved true in the world of Real Estate. In today's market we are still experiencing a buyer's market...which depending who you talk to the definition may vary, but the majority will tell you it is when inventory is over 6 months. As a listing agent in these tough times it can be very trying. There are still many misconceptions on the duties of a listing agent, but educating the sellers is first and foremost true duty.

Almost every listing appointment I go to the seller's conception is that the listing agent brings a buyer in the house every other day and has buyers lined up and it's just a matter of which house they will choose. This is just one of many misconceptions....which the reality of this one is the Internet and buyer's agency has almost completely eliminated dual agency. Let me explain....Years ago when an agent took a listing they would spend tons of money on magazine ads, newspaper ads and other print communications to advertise properties and then, when there was no buyer representation....(all agents represented the seller), agents would have their own buyers to showcase their respective listings. Enter the Internet. Print ads are a thing of the past. Agents still use magazine ads for listings, but the ad is not for the sellers....it is for the agent. Chances are someone will call about a particular listing and more than likely they will not pursue that particular house...., but the agent will then try to represent the buyer in the purchase of another property...nothing wrong with that at all....but the seller should know that a magazine ad is not the most prudent and effective way to market their home. With the Internet, agents can advertise their listings with a push of a button...after paying for the service of course. It is so easy to market listings now because they are "pushed" to almost every real estate website available. The Internet is like a 24 hour car lot where shoppers can browse all inventory and at their leisure select the ones they would actually like to see....that is why Open Houses don't work anymore. You can eliminate a lot of houses on the Internet without having to waste a tank of gas on Sunday driving around. Enter Buyer's Agency. About 7-10 years ago buyer's got representation. Meaning instead of ALL agents representing the seller, buyers could have an agent represent them and their interests. With this service available, buyers now surf the web, select a few homes they want to see.....and instead of calling 5 or 6 listing agents on the respective properties, they have one agent, a buyer's agent represent them...show them all houses they want to see and viola....make an offer. If you call the listing agent and make an offer through them...it's called dual agency...when one agent represents both parties, but the agent is merely a liaison between both parties, they cannot negotiate either side to hurt the others position. Dual agency can be done successfully, but the agent MUST disclose to both parties the situation.

So knowing the above information and going back to my initial "Location" declaration....The listing agent puts your home on the market, promotes it, receives calls from other agents and inquiries and hopefully brokers it to closing. Some houses will sell in a week and some in a month or a year...maybe never if the price or other factors are not tweeked. Some things you can't change. LOCATION is the main thing. Depending on where a property is determines how many views online and showings it will get....I see it every day through my statistics on my listings. I have listings that do sell in a week and some that have been on the market at least a year.....those listings all share a common trait....guess..............LOCATION.

So listen to the agent you choose to sell/market your home. You may think you know a lot about your market, but I guarantee your agent knows more than you...they are there to help and educate you. Listen to them the first time...if it is about price or painting a room...they have experience to back up their statements...or should anyway.... There is an old saying that pertains to many occupations and Real Estate Agents are not exempt...You don't pay them for what they do....you pay them for what they know.

www.BarnesMcQuade.com

If you are a homeowner and are fiddling around with the idea of adding onto your home whether it be a sunroom or a whole second floor there is one word you should memorize.........PERMIT. It always amazes me to see homeowners making major improvements to their homes, but not taking the time or small amount of money it takes to go to the courthouse and apply for a permit.

A number of things could happen if you don't permit and certain things may depend on the State, County and/or Town you live. For instance .......and the most important consideration to be made is resale value. I have run into quite a few homeowners listing their homes for sale and assuming that the addition "counts" as square footage. Square footage is what drives the price of the home along with age and LOCATION. According to the NCREC (North Carolina Real Estate Commission), and it would be wise to obey their rules, you cannot count/advertise square footage that is not permitted.....unless you disclose it's not permitted. It used to be that if you had a house with 1,500 square feet and an added 500 square feet unpermitted you could only advertise it as 1,500 square feet and then make a comment on the MLS that there is an "extra" 500 square feet of space not permitted. NOW you can advertise it as 2,000 square feet, BUT you must immediately disclose that the 500 is unpermitted. The problem with that is even if a reputable construction company did the work and you didn't pull or want them to pull a permit because it was extra money, Buyers.....and remember...they are the ones that determine Market Value and BUYS the home from you...are scared to death of the word UNPERMITTED. In other words, even if the addition looks great, buyers are going to shy away from an unpermitted home/addition. There are other downsides to not permitting which would be a whole different blog, but the gist is if you are going to add space to your home, pull a permit and save the headaches. For more information about your local Real Estate Market visit us here.

I was recently asked by Realtor.com to be a contributor to their new "Ask a REALTOR" program they started at the end of August of this year. Basically if someone emails Realtor.com a question they will distribute them to a certain number of REALTORS across the country and choose which one to use. I will....in the next few posts submit the answers chosen which will distribute through my blog page. They are VLOGS...which is the cool term for a video blog. Here is one of the first ones answered. As always feel free to contact me with any questions or concerns.

I am sure if you are reading this blog then you have been keeping up with the market and do not need a quick synopsis of what has been happening over the past 3 years. Realtors as well as Sellers have been struggling and hoping for better days; the buyers, well are just popping popcorn watching the show.

First off, let me say that I totally understand why SOME buyers are hesitant on pulling the trigger. There is not one week that goes by when I am just in a casual conversation when someone says "I can't imagine why it's so slow for you guys, the rates are low and prices are low...buyers are crazy not to buy now". True and not true. The fact of the matter is rates and prices are low, but in general a lot of people are unemployed and if they are employed they are shaking in their boots that they will lose their jobs, so buying a new home isn't even a thought now. BUT, for those that are very qualified and secure with their employment and currently out looking at homes and giving feedback like "house needs too much work, waiting for rates to drop, waiting for prices to go down or priced way too high for competition out there.......your days are limited to have that ability to pick and choose on your watch. I have many listings that are getting a few showings, but the above is the typical feedback from the buyer's agents. In the buyer's agents defense, they give this feedback from their clients and are not really sure what the buyer is thinking or is going to do. For example, as most Realtors can tell you...they drive buyers around for 2 weeks or so and seem to be gung-ho on one house and then never hear from them or at the least hear something like "we are going to wait". That is okay in some cases, but my point is we are at a pivotal time here when buyers should definitely get off the fence and make a move within the next 8 months or so.

For the past year you have all heard reports.....we are coming out of the recession, or the economy is picking up or this or that.....well, that is coming from people who want you to believe that, ie: the National Association of Realtors or Home Builders Association or any other trade group who needs activity to increase....which is a legitimate claim given "their" studies. But now the Housing Starts have been climbing since June which is the single best indicator that the Real Estate Market, no matter where you live will start to pick up. Maybe not tomorrow or next week, but with increased Housing Starts, the countdown to recovery has begun.

Bottom line is by mid 2010 Sellers, instead of getting dreadful feedback on how bad their kitchen wall color choice is, will be getting multiple offers and scoffing at minor house flaws that buyers are giving now. Multiple offers and lower days on the market will be seen again and buyers will have to make quicker decisions if they really want that house....and be willing to come a lot closer to the Seller's asking price.

If you are in the market to buy, now is the time to get serious and do something before the rates climb and housing recovers fully. For more information on my Local Market in Raleigh, NC please visit us here.

So where do I start? With the whole mortgage meltdown over the past few years there are a lot of people pointing fingers on who it is to blame. Quick answer....the greedy bank executives. Throughout this whole ordeal there has been one group of people everyone loves to point there finger at and lay blame..... The Appraiser. When times were good (hyperbole) because they weren't really good, the appraisers are in hindsight catching blame for giving "too High" of a value on properties, therefore putting homeowners in a house that isn't worth what they paid....these days they are getting blamed for deals falling through for not giving enough value for the home....and now the Realtors and sellers/buyers are upset at them. Here is a fact, not opinion: Appraisers report the facts; what the market is bearing. Sure, there may be some bad apples out there trying to make a sale and give a "not so accurate" report, but they have an Appraisal Board to take care of them.

Lawrence Yun, the "Chief Economist for the NAR" recently is reported saying..."poor appraisals are stalling transactions." He attributed May's less-than-expected sales increase on the fact that "some contracts are falling through from faulty valuations that keep buyers from getting a loan." If these reports are indeed faulty, again, don't blame the Appraiser, blame the system. Appraisers now must abide by the HVCC , which stands for the Home Valuation Code of Conduct. Part of what is going on here is some banks have to use AMC's"Appraisal Management Companies" to outsource Appraisers. From what I know of Appraising in general to all the Appraisers I speak to here is my take on this:

With blame falling on lenders and appraisers over the past years for these two having cozy relationships....meaning a lender knows a great Appraiser and keeps using them because they are good OR interpreted.... they ALWAYS hit our number requested......the AMC's were injected as a firewall to not let lenders call there "guy/gal" to do their appraisals for them....Appraisers are now randomly chosen by the AMC's to complete the order eliminating the "cozy" relationship. This probably does cut out some of the "bad apples", but not really, because underwriting is more strict now and they are actually paying attention to the reports unlike the past when they were zipping through them just to get to the next one. WHAT THIS ACTUALLY DOES is counterproductive. The AMC's are now (this actually happened to me) getting an Appraiser from Greensboro NC to appraise a home in Raleigh NC....and he/she didn't even have access to our MLS.....HOW is he/she to get accurate information without our MLS....banks don't care because he was cheaper and doesn't know the lender. D.U.M. dumb. The banks are shooting themselves in the foot AGAIN. They should allow lenders to choose their Appraisers as before because now there are more safety nets in place.

Here is the worst of it, the Appraiser is just like the Realtor, Loan officer and Home Inspector in the sense that they have worked all these years to get a clientele base to work with referrals. So over the years they have developed relationships with lenders and can count on a certain amount of business coming in every month. Now, they lose all these contacts because lenders are forbidden to call "their guy/gal" to get the appraisal done. If they do get work, it is on rotation from AMC's that pay less, but charge the buyers more during the application process. So an appraiser just starting out may possibly get just as much work as a seasoned appraiser.

I may be wrong, I may not have all the information needed to express my opinion, but to me it all goes back to the banks making all the money with the bad loans.....losing their shorts and then coming back making new rules that only benefits them. I understand there has to be guidelines and restrictions in place to protect their investments, but common sense should be a part of their decisions.

Just think, if we all paid cash it would be a lot easier:) (now that's a joke)