Bob Mitchell - Realtor St. Louis

I just read a post by Mellisa Grant called, "You Might End Up Eating Your Own Blog" where she talked about people reading our blogs and taking the information that we provide, then going out and selling their home FSBO. I'm 100% certain that this happens just as there are people who do their research at brick and mortar stores, then buy a product online.

I even kind of did this recently with a bicycle. I had originally taken my old 10 Speed in to see about getting it back into riding shape and the salesman at the bike shop "sold" me on the idea of buying a new bike. I didn't buy a bike that day, but it did get me to thinking. I ended up going online and doing quite a bit of research and found a comparable bike to what he was attempting to sell me for about $300.00 less. I ended up buying that bicycle online.

So, what's the difference between me buying that bicycle on line and somebody reading our blogs, gleaning information from us, then going out and selling their own home? There's a lot of difference!

One, while a professional bicycle shop can help you in a lot of ways from proper sizing to customizing the bicycle's components you can pretty much get this information on line. For some people having that expert there to hold their hand is worth the extra money. For folks like me, I enjoyed doing the research.

This is probably also true for a lot of folks who would sell their homes FSBO, but if I screwed up and bought the wrong bicycle or didn't equip it the right way, then I'm out $400.00. If a FSBO screws up their deal, they could be out thousands, even ten's of thousands of dollars! So, it's a matter of risk vs. reward, to a certain extent.

Secondly, there is a lot of specialized knowledge that comes with years of experience and that you only acquire by doing deals. How many of you have talked to a FSBO who was completely confident in his/her ability to sell their own home? I market to FSBO's quite a bit and I come across this sort of seller all the time. It's funny when I ask them how many homes they've sold before on their own. Most of the time, the answer is 1 or 2. Sometimes I've talked to people who have even sold 3 homes on their own! Can you imagine? 3 homes? Wow...

When I ask them over how many years did these sales transpire and I get the answers....5 years, 10, years....35 years! "So, let me ask you this....say it was going to be impossible for you to sell your own home...say you had to relocate suddenly and wouldn't be here to show the home or to negotiate a contract, etc. Would you hire an agent who had only sold 3 homes in the past 35 years? ;-)

But Bob, I'm New To The Business And I've Only Sold Two Homes!

Okay, I see your point. While it's true that we, as a "profession" have brought a lot of this doubt about our abilities onto ourselves by allowing the requirements to get and to keep a license to be so lax, even the greenest or dumbest of agents generally has a host of resources behind them that an individual home owner generally doesn't have.

If something goes wrong with the transaction....say, the buyer gets turned down for their mortgage....does the FSBO have the knowledge to dig in and "fix" the problem? Maybe, but probably not. Even a brand new agent though can go into their broker's office and get their broker to bring their years of experience to bay on the problem. In short, it's a matter of resources.

Speaking of resources, look at all the ones that we as real estate professionals have.

1) The MLS. While it's true that FSBO's can now put their homes onto the MLS for a modest fee, I wonder how often these homes are shown by agents as compared to homes that are listed with full-service agents. This is especially true if the seller doesn't offer a commission that is comparable with other homes that they are competing with.

2) Your local board. Here in St. Louis our board offers a host of resources from a library and continuing education to a legal hot line manned by lawyers from one of the most prominent law firms in the city.

3) Other agents. Being a smaller brokerage I've made arrangements with a couple of other small brokers to cover for me in the event that I have to go out of town or am otherwise unavailable. Forums such as Activerain also provide a wealth of knowledge and experience that we as a group can call upon.

4) Related Service Personnel. How many times have you encountered a problem where the solution was in knowing "who" to call? Mortgage lenders, title reps, surveyors, home stagers, roofers, plumbers....the list goes on and on....but we work with these people time and again and they are also a huge resource available to you that a FSBO simply isn't going to have. At least not anywhere near to the same extent.

The Pie Has Shrunk

Finally, we have statistics going for us. I don't have the specific statistic at my finger tips, but I believe that it's something like 85% of all homes that sell, sell through a real estate agent. While it's true that most real estate markets in the country are experiencing a down turn in the number of buyers who are available, there is no reason to suspect that FSBO's are going to gain market share on us. The opposite is probably true because agents who had been busy before in better markets are now slow and are marketing to buyers like never before!

If this assumption is true, then if our piece of the pie has shrunk, then what has happened to the FSBO's piece of the pie? I doubt that it's gotten any larger. If the professional real estate agent has caught a cold, it's my belief that FSBO's will have caught the flu!

In other words, "in this market, FSBO's need us more than ever!"

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

I've been talking with a gentleman from California who is getting ready to relocate here to St. Louis. While I was introduced to him through the real estate side of my business, we started talking about how he was going to finance his purchase.

Turns out that he's doing what a lot of borrowers do. He's shopping the internet for a lender.

He'd been on Lending Tree, as well as several other of these services where "Lender's Compete For Your Business" and had actually gotten to the point where he was confused because all of these lenders were telling him different things.

One told him that they would have to treat the purchase of his property here in St. Louis as an investment property because he hadn't sold his home in California yet (not true, by the way) and another told him that that he would have to go with an adjustable rate because his back end ratio was going to be too high for a fixed rate (again, not true). Yet another told him that he would have to pay a higher rate because his middle credit score (it was in the mid 700's) was too low to qualify for their "excellent credit" programs.

As I thought about his situation, I started to wonder about the downsides of a guy in California, buying a home in Missouri and talking with lenders from New York! Aren't all real estate markets local?

Also, with all of the complexities of mortgage lending, how good can you expect a call center employee to be? God forbid, but what would happen if something went wrong with this guy's transaction? Would Roger, the call center guy who was of the opinion that you can't buy a primary home in the city that you're moving to until you've sold your previous home (even though you more than qualify for both notes?) be able to handle an appraisal or title issue if one were to arise? Something makes me wonder???

It's Not Limited To Lenders

Then I got an email from another person relocating to St. Louis. He had read my blog and was curious if I would mind him asking me a question or two.

It turned out that he had been required to work with a specific agent whom had been referred to him by his company's relocation firm. Actually, he was free to work with whomever he choose, but if he didn't work with this particular agent then his company's relocation package wouldn't be available to him.

One of the questions that he wanted to know was if it was true that the entire city of St. Louis was a "War Zone"? Apparently that is what this agent had told him when he expressed a desire to live in a more urban setting and wanted an older home with character.

While I didn't want to step on this agent's toes or violate any agency relationship that she might have with him, this was Hog Wash and I felt compelled to tell him that. St. Louis has many areas that have "older homes with character", both in urban and suburban settings and the entire city of St. Louis is not a "War Zone"!

So, again I was left wondering if these service providers knew their axx from a hole in the ground? If this lady could be so misinformed about something like the characteristics of a city that has some wonderful neighborhoods with homes ranging into the millions, what else could she be misinformed about?

My Conclusion - It's Important To Know Whom You're Dealing With

I honestly don't know what the ends and outs of the relationships between relocation companies and the employers that they work with are. Or what this guy's options are regarding getting a different agent, but it would have me concerned if she had made such statements to me.

If it were me, I'd want to work with somebody who was more aware of the various areas in her market area, if nothing else.

Regarding the guy shopping the internet for a mortgage, his situation too would bother me. I don't know that I would want to work with someone who is sitting in a cubicle with a headset on playing Nerf basketball as we discussed my mortgage needs.

Maybe this caricature of the internet lenders isn't 100% fair and there are really some well qualified people manning their phones, but from this guy and other's experiences, I do really wonder.

Be it my mortgage lender or my real estate agent, I would want to feel comfortable that there was somebody who was skilled, knowledgeable and committed to serving my needs working in my corner. Somebody who I felt I had a relationship with and who would look out for my needs in the transaction. In short, I would want to know and feel comfortable with those service providers!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

Last week I was showing property and came across one that was a foreclosure and that was priced to sell! Even in this market, it was considerably below the market, so we wrote on it. The bank required a 5 day answering time on the contract, which I didn't like at all. The reason that I didn't like it is that you can't steal something slowly!

Sure enough, after we wrote several other contracts came in and the bank successfully "shopped" our contract and accepted one for more than the asking price. Needless to say, my clients were disappointed.

I'm going to keep an eye on this property though because for some reason I think that this contract is going to fall through. Considering the work that the property needed, my client's offer was indeed pretty reasonable. Something tells me that the buyer is either paying too much for the property or plans on playing a game back on the bank. I have no reason to think this, other than my gut, but we'll see.

Anyway, my main point here is that if you are out shopping for a home and do come across a deal, don't mess around. Even in this market, if it's priced right, it will move!

Bob Mitchell

ValueList Real Estate Services, Inc.

Sunday I had an appointment cancel and being as how I just got a new bike (it's being assembled as we speak) my girlfriend Kathy and I decided to explore some of the biking/hiking trails around St. Louis.

Not knowing where to start, I got on the web and found a site that belongs to the Gateway Off Road Cyclist Club that had a ton of useful information, including a really cool google map of St. Louis area trails. That's where we found the Lost Valley Trail in the Busch Wildlife Area, which is located south of Hwy 40 on State Route 94. From 270 and 40 (Interstate 64 to you out of towners ;-) it only took us about 20 minutes or so to get there.

The trail head as a gravel parking lot that even on this early March day had several cars in it, though we only saw three other people/groups out riding, hiking or jogging.

We didn't hike very far, maybe a couple of miles, but it was all pretty level and while there were some muddy spots, it really didn't seem that bad considering all of the snow that we had recently received.

As we hiked, it was easy to forget that we were actually so close to the city. It made me anxious to get the bike out of the shop and get out there on it! I would definately recommend it for an afternoon out, either hiking or biking...oh, I didn't get to see it, but I understand that there is an abandoned logging road that cuts the trail in half and I CAN'T wait to check that out on the bike!

Have fun!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

What is a loan servicer's responsibility to a borrower in default due to a sub-prime mortgage adjusting? Do they have the responsibility to inform the borrower about possible remedies available to them? Do they even have a responsibility to be civil to them?

The reason that I'm asking this question is that yesterday I got a call from a lady who has gotten caught up in this sub-prime mess. When she purchased her home she did so on an 80/20, 2 year adjustable with an initial interest rate in the 7's. In November the rate adjusted into the 12's and she simply can't afford it.

When they got the notice that their mortgage rate was adjusting they called to see if they might be able to refinance the mortgage since her job situation had improved and were told no, that they would not qualify for a conventional mortgage. From what I understand, they ended up falling behind on their mortgage payment as they attempted to juggle it and their other obligations. After having missed a third payment in a row, they mailed a check that would have made up two of the payments, but not the entire amount.

That check was returned to them with a letter explaining that they had handed the loan off to a "foreclosure firm". They contacted that firm and were told a workout plan was possible, but that they would need to send them a check for $1,200.00. Apparently (I don't know this for a fact and am relying upon this lady for this information), they cashed that check and did nothing. They were told that they needed to bring the loan current or else this company was going to move forward with the foreclosure. Calls to the initial lender were referred to the "foreclosure firm", who basically demanded what was now 4 months of payments.

Now, I'm not that well versed on "Project Hope" or any other "workout" plans, but shouldn't a firm that specializes in foreclosures be familiar with these programs? From what I've read this morning, it would seem that this lady and her husband would probably qualify. I would have thought that a mortgage servicer would have been eager to work something out with these people. They are both employed and from what I understand making their payments before the big interest rate adjustment, so why not work something out with them? Half a loaf is better than no loaf, isn't it?

Right now, I'm waiting for her call so that we can conference the loan servicer to see what can be worked out. From past experience I've found that loan servicers are generally a bit more reasonable when there is a "dis-interested third party" on the phone with them and not just the borrower.

I don't know these people from Adam and to tell you the truth, they're probably isn't a "deal" in this for me, but it seems like the right thing to do to attempt and help them. Hopefully, I will be able to help them negotiate an acceptable work out plan and maybe I'll learn something in the process. One way or the other, I'll keep you posted!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com