60 DAY REALTY

A Dead Deal

2009-09-22T14:35:00.004-04:00

My alter ego purchased a house in Aug of 2009. The alter ego in turn put it up for sale to make a profit. I got a contract on it almost immediately. I discovered termite damage a short time after the contract was put together. I decided that I should have it treated by Bright Pest Control here in Louisville, KY. The buyer worked there and I got a deal on the actual treatment. I was really thrilled to be honest. My carpenter who I use on all my houses went over to estimate the damage to repair at $3-4k. It was expected and I was happy with the quote. The buyer asked for Bright Pest Control to go over and get a quote as well. They gave her a $14,800 quote which scared her off and killed the deal. I told her I had one quote at $3-4k and immediately got another company to put a quote together and they came back at $4k. I provided both of these estimates to the buyer and she still walked.

I really don't blame her. It wasn't her fault. She trusted Bright Pest Control. She doesn't understand how simple it is to repair that type of damage and make the house safe and secure. She only knew she worked there and she trusted them. When they handed her a $14800 quote there was no way I could overcome that. The relationship she had with the company could not be overcome regardless of rational quotes showing how out of line it was.

Bright Pest Control killed the deal with their $100+ linear sqft repair bill. The Realtor in the deal, me, handymen, the banker, other Realtors could not fathom the cost and how ridiculously high it was. I called to calmly let them know today that I'll not be using their services in the future and that I'll explain to every Realtor I come in contact with about how their bid for repairs ruined a deal. I've had home inspectors kill deals (which is understandable on many levels), bankers, parents, even other Realtors. But never in my years of doing this have I had a termite company come in and do this to me.

Craigslist Realtors

2008-05-26T12:32:00.003-04:00

I'd love to know the success rate of Realtors placing ads on craigslist. I know it's easy to put on, it's free and anybody can find it.

To me though it just seems a mess.

Why would you take even 5 minutes to put a listing in something that is virtually unsearchable by specific data such as bedrooms, baths, price and sqft? Most times Realtors don't even put on pictures. They are once again grasping at straws and shooting in the dark hoping to get that one call.

Focus people! Internet/MLS and Yard signs are no brainers. If people are on craigslist they are looking for a FSBO. They'd be on a local MLS search or Realtor.com if they were really serious about house hunting. They'd be driving around the area where they want to live. They'd be listening to their friends about new houses that just came on the market in areas they are familiar with.

Marketing is important and if done correctly will reduce the number of ridiculous lookee-loos and HOURS you spend talking to them. Be very specific about your targeted marketing, stay away from small percentage success tactics and stick to the basics. You'll save time and money.

If you get so big that you've got money falling out of your ears, go ahead... spend the time promoting your business in large forums to reach that extra level. Just make sure your methods and successes are already in place prior to it.

Jay Bowman, Broker
60 Day Realty
Louisville, KY
502.272-0060

Campaign of Letters

2008-04-29T09:32:00.003-04:00

Ok... so I started a daily mailing campaign to test out an Expired/Canceled Listing letter I found on the internet.

Of the 100 or so I sent out, I expected a 1-3% call back rate.

No such luck. No calls and though I attempted to weed them out over 20 letters were returned stamped VACANT.

I even switched up the last batch I sent out by putting the company address label on the back of the envelope and placing a penny inside.

I should probably follow standard protocol by using non-flag stamps, odd shaped envelopes, avoiding putting my companies name on the return label (WHICH is to be placed on the back flap of the envelope) and just tucking the flap into the envelope. No licking.

Do you send out expired listing letters? Canceled listing letters? What do they say? Do you have a special trick to get people to call you? So many questions.

NAR Statistics

2008-04-25T11:50:00.007-04:00

I've had many discussions with many different Realtors about what sells houses. Realtors, ads, Open Houses... the list goes on and on.

After doing my research I found the National Association of Realtors 2006 statistics on how buyers found their home to purchase. I kept forgetting the blog name so I've decided to link to it HERE.

In 2006 the stats broke down like this:

36% Agent
24% MLS
15% Yard Sign
8% Friend or Relative
8% Builder
5% Newspaper
3% Knew the Seller
1% Homes Book or Magazine
less than 1% All Other Options

I look at these stats from two years ago and a few things immediately jump out at me. The MLS is what agents use to find property and it is readily available to the general public through many websites. I believe we can safely combine them together.
The MLS available through the internet is where 60% of home buyers found their home.

8% found the home through a friend or relative telling them about it. 3% found it by knowing the seller. Either way, the home was found by a middle man who was or knew the seller. Word of mouth about the listing moved the property regardless of channel so I group them together: 11%

Newspapers and the home magazine advertising combined make up a whopping 6%.

So with the adjustments this is the way I see buyers finding properties:

60% Internet/MLS
15% Yard Sign
11% Word of Mouth
8% Builder
6% Advertising in Periodicals
less than 1% All Other Options

To me, in this day and age, standard real estate no longer makes sense. 5-7% commission is charged to the seller when it is obvious that the internet, a yard sign and word of mouth from people sellers know will make up 86% of the reason a buyer will find a house.

Look at that again: 86%

Realtors pay yearly dues to belong to the various associations.

A yard sign costs... $60-$100 depending on quality?

Realtors don't control word of mouth.

Yet for a 6% success rate Realtors justify high commissions in ridiculous, aged, convoluted periodicals. I don't see a high rate of return on that. With this stat it only makes sense that the true reason Realtors advertise or do open houses is to pick up buyers while sellers pay for it. The sale rate is far to low for them to say otherwise.

Sellers still believe this form of advertising is important b/c Realtors say it is. I'm not sure which party is the less educated in the statistics.

Please someone tell me why a 6% commission is justifiable in this day and age. I would love to know.

Jay Bowman
Broker/Owner
60 Day Realty
Louisville, KY

60dayrealty.com

The "Please Wake Up And List With Me" Letter

2008-04-17T08:37:00.003-04:00

On any given day in the city of Louisville there are roughly 10-20 Expired and Canceled listings. Before the Do Not Call list appeared in the world, I would be on the phone around roughly 9am to call these people to see what their intentions were and do my best in the 30 seconds I had to convince them that I was the only person who could sell their house.

Now it is a little more difficult to get a hold of people.

Many people are on the DNC list and even if they aren't you still have to comb THROUGH the list to get the number. Then you hope they are home, still have the same number or have a home phone at all.

That's why I'm relying on the good ol' US Postal service from here on out.

I've never been a big fan of shoving myself in people's faces to get a listing. I apply slight pressure, smile a lot and let them know the program I have can benefit them. If they are unable to see the benefits beyond that, that is their decision. I would chose to work with the people who, through careful thought and logic, would chose me and my company.

I found a letter on ActiveRain written a couple years ago by a man in Florida. He laid out exactly what he sent and says he gets a 1-3% success rate. To be honest, I think it could be better than that using a couple other techniques, but it was only the letter I was interested in.

So since last week, I've mailed out roughly 50 letters. Homemade letter head (looks cheap but will do for now), white envelopes, printed labels and handwritten addresses will hopefully entice people to open the letter.

I don't seal the envelopes. I just tuck the flap in. I stick a penny in each envelope to add an odd weight to the letter. If it moves in the envelope, hopefully it will further draw attention to my call to action.

Yellow Letter Campaign states that you should use "announcement envelopes" to send information out like this since it stands out amongst the other 12" envelopes, making it more likely to be opened. Use a commemorative stamp instead of the regular flag stamps and use red felt ink pen to write with. All these things help draw attention to your letter.

I haven't taken all these steps as of yet. Just trying to start to figure it out.

Do you send letters to expired or canceled listings? What is your success rate? What do you do that works? Please let me know in the comments!

Ummel v. Little

2008-04-10T22:36:00.002-04:00

phoenixrealestateguy.com reported earlier today that the jury in Ummel v. Little have sided with the agent.

This case, and the fact that the jury has sided with the agent, was HUGE.

In the whole mortgage meltdown there is one party, in my eyes, that is less culpable than buyers, banks and appraisers: Realtors.

As we all know it is a very inexact science in determining the value of a home. For Buyers to turn on their Realtor for incompetence is understandable. For a Buyer to scream b/c the house they bought is no longer worth what they bought it for is an unfortunate market reality right now. BUT to blame the Realtor for all that has gone wrong is ludicrous. The sellers listed the property, but in reality the buyers determine the value. Realtors are the facilitators.

It is our duty to make sure the Buyer finds the right property, understands the terms of the contract then we do a LOT of hand holding. We can help people understand why something is priced where it is, but we don't determine the price.

Am I off base here? What can we do to further defend ourselves?

An Open Letter To All Who Read

2008-04-01T15:34:00.004-04:00

Hello all,

As you may or may not know I've been working in real estate off and on for the last 8 years. As I ventured further and deeper into wholesaling, rehabbing and renting property it only made sense to open my own company to manage this business.

60 Day Realty has been operating for some time, but not actively seeking business of buyers and sellers. That is changing however. 60 Day Realty's website went live yesterday at www.60dayrealty.com and is there for everyone to view. You can find a link to our Facebook, Blog and Twitter (where we notify you of the day's interest rate, important real estate articles and special deals).

As I got into real estate some time ago I asked a lot of questions why things were the way they were as Realtors were viewed as necessary evils by much of the public. My conclusion was real estate agents were afraid to allow buyers and sellers have the control in the relationship. To give them control was to leave Realtor's commission and power vulnerable in the Realtors eyes and that was unacceptable. It was also a fear based decision.

60 Day Realty has taken what buyers and sellers disliked most about Realtors and the real estate business and has attempted to eliminate it.

For buyers, we have instituted a 1% rebated toward their closing costs based upon their purchase price. So a $100,000 purchase would give a buyer $1000 at the closing table to apply to taxes, insurance, bank costs or interest rate reduction.

For sellers, we have eliminated long term contracts by listing homes for ONLY 60 day periods. If the seller wishes to continued their relationship with us beyond that, we will extend the agreement for another 60 days.

The biggest benefit to sellers however is the flat fee. 60 Day Realty will list and sell your home for a flat fee. The fee is based upon your sale price and is paid only if the house sells.

Let me give an example: If you were selling a $100,000 home, it is reasonable to assume that you will pay around 6% to a Realtor to do so. On a 50/50 split that would be 3% to the buyers agent and 3% to the listing agent. That is a $6000 commission.

If you were to use 60 Day Realty the total commission on a $100,000 sales price would be $4495. An estimated 3% to the buyers agent and $1495 to 60 Day Realty. The true beauty of this program is if 60 Day Realty sells the house without any other agent involved, the total commission would only be $1495. Either way you are going to save money.

If you have any questions about this please don't hesitate to contact us. You can reach me by email at jay@60dayrealty.com or at 502.641.9169.

Check out the site and please let me know if we can be any assistance!

--
Jay Bowman, Broker
60 Day Realty
502.641.9169
www.60dayrealty.com

Good Rule Of Thumb

2008-03-27T16:00:00.004-04:00

I had an old client call me today to come look at his house to possibly sell it. He was looking to at least get a few grand out of the selling of it and he wanted to know what I thought.

I'll tell you what I told him. He bought it a year ago and if he's lucky he's going to JUST break even. The more likely scenario is he may owe money.

If you are buying a house, you should plan on holding it for at LEAST 3 years. Anything less than that and you are taking a big chance in the house having not appreciated enough to cover the cost of the agents commission.

If you're selling your home with a standard real estate company, you can look to pay around 6%. That means if you bought your house for $100k just a year ago, you're going to need to sell it for around $106,500 just to break even. And that doesn't cover the closing costs you paid to buy or sell it.

With 60 Day Realty's program, he will need to sell it for $104,500 to break even. A $2000 savings.

As long as his house is not overpriced or in poor condition, given an acceptable period of time we should be able to sell the house.

If you have any questions or comments please let me know!

Jay Bowman, Broker
60 Day Realty
502.641.9169

100% Financing Going The Way Of The Dodo?

2008-03-25T11:55:00.003-04:00

As long as I can remember 100% Financing has been around. Granted, I've been doing real estate since 2000 and that is no snapshot of mortgage history, but for me I can't remember a time that it hasn't existed.

That may be changing.

With the meltdown surrounding the mortgage industry, I have been holding my breath in anticipation of banks move away from 100% Financed loans. Seems it is finally starting.

This is not a great idea at a time when monetary liquidity in the real estate market is needed, but it is to be expected. I watched in the early 2000s when people with high 500 credit scores were getting 2 and 3 year ARMs (adjustable rate mortgages) at 100% financing. Banks were rolling out loans as long as you had a pulse. And as they did, the pendulum swung heavy in one direction.

Now that the credit crisis has hit banks, foreclosures dominate their balance sheets due to their business decision and the cash flow days of the refinance boom are gone, they swing as hard and as fast as they can in the other direction. They will go into defensive stances and 100% Financing will be the first to go. More stringent requirements will be required to obtain a home loan and soon you can bet that you'll need to bring 5% down if you are planning on purchasing.

FHA is still out there for those of you who are looking for a minimum down payment (around 3%). It was a dead loan program up until the last 6 months. Now people with lower credit scores with hardly any money needed a program to flock to. The US Government was happy to open their arms.

Also on the chopping block sit No Income, No Asset loans, Stated Income, Stated Asset loans, and Down Payment Assistance programs. I don't believe these loans are bad business. They have their place in the mortgage industry, but they were abused and are now being punished due to poor long term outlook of both corporations AND the individual buyer.

At a time when patience and calm thought is needed, it seems the strongest institutions are panicking.

It was nice to have you around 100% Financing. See you in the future... hopefully.

Jay Bowman, Broker
60 Day Realty
502.641.9169

Buyers and Sellers - A Marriage Made In Frustration

2008-03-20T09:45:00.000-04:00

When I am listing a house, I always emphasize to the sellers that the selling of a home is a business transaction and it is nothing personal. They are selling a product that someone (hopefully) wants to buy.

In the end though, when it comes down to brass tacks, that's not how it's viewed. They are selling Christmas memories, birthday parties and Thanksgiving dinners. These things in their mind are priceless and unfortunately, in many seller's minds, inflates the actual price of the home.

The buyers on the other hand are looking for a deal. They want the best house for the cheapest price possible. There are no memories yet and therefore they are willing, many times, to go as low as possible.

It is not easy to bring these two parties together, but there are a couple things they can do to make the transaction easier on themselves.

Sellers: Take the time to review the comparable sales brought to you by the Realtor. The houses that have SOLD and are in your general neighborhood or subdivision will be your yard stick.

Remember the buyers are looking for a deal on the house, but you deserve fair market price (FMP). Don't put a 6k new roof on and then a week later list your property for 6k more than the FMP. There are very few things you can do to a house to actually INCREASE the value above and beyond what your neighborhood's market will bear.

A 10k new kitchen in a simple home neighborhood isn't likely to be a good investment.

Buyers: Remember that this is more than a house to the sellers and that a fair price should be offered.

Yes, sometimes there are extenuating circumstances in which the seller will come down far below market price, but they are few and far between. If you low-ball a seller you are starting off on the wrong foot. Even if you get the house at that price you still have inspections to go through and may need to ask for repairs. If you have already done a good job kicking the sellers in the shins, the possibility of getting what you want repaired diminishes greatly.

This topic is a big one and there are many questions you may have. Please feel free to leave a question or comment in the comment section and I will answer it to the best of my ability!

Jay Bowman, Broker
60 Day Realty
Louisville, KY

60dayrealty.com