Pat Savani

One of the most important services a real estate agent provides to the consumer is good counsel. It is not as easy as it sounds. Being sensitive to a customer's feelings while giving honest counsel and feedback is a delicate balance of tact, and diplomacy.

• Bright colors or wallpaper that express a strong statement of personal taste can get in the way of a sale an agent may encourage you to remove wallpaper and to paint the walls with a neutral color.

• Different color rugs in every room can make the floor plan look like a jigsaw puzzle, re-carpeting with a neutral color may be the answer.

• Household odors because of pets, smoking, cooking etc. are difficult because often the owner doesn't smell them but a prospect does.

By allowing an agent to be direct and give you the feedback you need to prepare the property for sale increases the probability that you will have a sale in a reasonable period of time at current market value.

Rising rates usually affect home prices to some extent. This was evident in the most recent boom when affordability was up in the 140% range, rates were low and there was a climate of optimism. Buyers paid increasingly higher prices for properties.

Another example is in the early 80's when rates were high topping out at 17.5% prices were discounted to keep monthly obligations and affordability where buyers could afford to buy. Having said this, today's circumstances contradict past actions. Affordability is up in spite of historically low rates and prices are down at the same time. Usually prices would be up as rates go down but that is not happening.

Consumer confidence and the adverse effect of short sales and foreclosures have kept prices down while rates are down. Additionally, should interest rates increase as they may, will depend on the economy, and how deep the correction in property values goes. Also how optimistic the future looks to the consumer will impact how interest rates affect the future of home prices.

Also employment, inflation and wages will play an important role. When we look at the past 20 years we have had rates as high as 13% and as low as 4.5% and overall home values have continued to increase. In the short term you can be up or down but in the longer term if you are in a property over 7 years you usually are making money in addition to the fact you have had shelter. We don't look at it this way but if a $400,000 property cost you 7% in acquision costs $28,000 and over 7 years it grew 7% you would get 100% return on your original investment plus any tax benefit you would enjoy, plus shelter.

The ability to control $400,000 with 7% is still hard to beat. (Example with FHA it is a 3.5% down payment plus closing costs) I'm not an economist but I believe real estate is a good investment. If inflation is in our future real estate usually will track pretty closely to the rate of inflation. I am including a historical rate chart with this post I believe it supports my position that over time property values grow.

Buyer's Remorse.

When a buyer is not prepared for buyer's remorse they think that they are the only ones that have ever experienced it. They get cold feet and want to change their mind and declare their contract null and void! Their change of heart usually has no logical basis but is an emotional response to the decision that they made. All the reasons they purchased in the first place are still valid but they panic and attempt to justify the panic with logic. Family responsibilities, finances, work obligations grow in magnitude and the home purchase may begin to overwhelm them. This is difficult to overcome after the panic has set in. Saying that this is not Nordstrom's, and you can't just return the property for a refund doesn't usually help.

The best way to have the buyer survive buyer's remorse is to prepare them for it. Most people find making decisions difficult. Just think about the last time you were out to dinner with someone, you probably heard the question "what are you going to order?"

Sometimes one decisive person can influence the whole table and everybody orders the same thing.

Most people don't like making decisions and will second guess themselves after a major one. You can help the buyer survive this moment of doubt by setting expectations.

• Tell the buyers that they may become concerned over the decision they made even though they made it for all the right reasons.
• They may become concerned because of the economics of the decision or just the magnitude of it. Then assure them not to worry everybody that buys a house goes through this moment of doubt it is normal.
• Remind them that they had valid reasons for making this purchase and they will still be good reasons tomorrow.
• Explain that it is so common that there is a name for that moment it's called Buyer's Remorse. It's only a problem if they don't expect it.
• Assure them that if they experience any remorse, it is normal and that they should remember that you have warned them that it may happen and not become concerned.

When you meet them next ask if they experienced it, in almost every case they have. Only the unprepared don't survive it.

I am convinced one of the most difficult things we do when negotiating is to communicate effectively. More transactions are lost because we misunderstand, don't listen, assume we know, don't call back, don't clearly articulate, don't write it down or don't work to build consensus.

To communicate effectively we need to:

1. Listen
2. Try to understand what the other party wants and why they are requesting it?
3. Know if a request is a casual want or an absolute need?
4. Know how to identify an alternative option that will satisfy their request?
5. Return calls promptly, especially difficult ones, they don't age well.
6. Make sure all written communication is clear and expresses the exact terms of the agreement.
7. Be professional and unemotional in our communications, our clients don't need an emotional agent.
8. Listen, we will never hear if wwe are thinking about what we're going to say next and not listening to the answer of the question we already asked.
9. Ask good questions to get all the facts and never assume we already know the answer.
10. Try to build on areas of agreement to build consensus.
11. Appreciate that the person we're speaking with may be under a lot of stress or having a bad day and not take it personally.
12. Leave our ego out of it, when everyone feels like they won it will be easier to get agreement.

Monetizing the $8000.00 tax credit

The clock is ticking to have the $8000.00 tax credit available at the time of settlement will make a big difference to the first time buyer that needs their cash for their down payment and or closing costs.

At the mid year meeting NAR and the federal government agreed to make this a reality. Since the $8000.00 Tax Credit is a real credit and not a loan it is a terrific opportunity for a home buyer that has not owned in the past 3 years.

Since the buyer must close by December 1, 2009, the monetizing of the credit to give the maximum benefit needs to occur quickly. The first time buyer is the first in a line of transactions. Their entrance into the market unlocks a chain of contingent contracts.

For those that have already purchased this year and are entitled to the credit they can amend their return and get the credit now. The form needed is Form 1040X available at http://www.irs.gov/