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I don’t do “New Year Resolutions”

It is that time of year again!.  soon, gym parking lots will be full, weight loss programs will be thriving, Nicorette gum will fly off the shelves and 12 step programs will be filled to capacity.  Why you ask?  It is that time of year when most people make “new year resolutions”.

I used to join the masses but in the last few years I decided to go a different way.  In my case, and from what I have observed, new year resolutions generally DO NOT WORK!!  They typically last anywhere from a few days to a few months, then………failure.

It is my belief that unless one sets a GOAL out of the desired outcome, very little happens.  Not just any goal but a SMART goal.  For years I  have studied the psychology of goal setting and here’s what I have learned.  Goals must be:

  • SPECIFIC – Goals must be specific.  Meaning we can’t say I want to make a lot of money next year.  How much?  Is that gross revenue or net revenue?  Generally, good questions to ask ourselves at this point are:  who, what, where, how, when, and most importantly te big why.
  • MEASURABLE – How are we going to measure this goal?  Perhaps in the example of making a specific amount next year, a quarterly review might be a good reality check.  Are we on target?  DO we need to modify our efforts, behaviors or work ethic in order to stay on target?
  • ATTAINABLE – Once we establish specifics and measurement mechanisms; incremental achievements, when tracked will get us closer to our goal and we start seeing a light at the end of the tunnel.  But that only happens when we laser-focus on the outcome and don’t deviate.
  • REALISTIC – Goals must be realistic yet they must also stretch us and motivate us to work hard.  Weak goals are generally easy to reach and leave us unmotivated and vulnerable to deviation from plan.
  • TIMELY – Goals MUST have a deadline.  The motivation, sense of urgency, creativity and hard work come out when have a “due date”.  Think back at a time we you did your best work under deadlines.

Goals are meant to keep us focused and achieve levels we never accomplished before.  If we set a goal with a deadline and achieve that goal before the deadline, a new goal MUST be set immediately.  Say for example your goal was making $100,000 next year by December 31, 2014.  What happens when you reach $100,000 by October?  Answer is reset the goal and to $120,000 and keep going.

What if we set a goal for that same $100,000 and by December 31, 2014 we “only” made $90,000?  Reset the goal for next year.  Making adjustments along the way is also key, this falls under the MEASURABLE part of SMART.

Happy new year my friends and forget about New Year Resolutions and set those SMART GOALS!

We are starting to see signs of what I call the “2005 insanity” in the Northern Virginia market.  Multiple offers, escalation clauses, waiving appraisal, financing and inspections and other potentially dangerous trends.  Although this may be good for sellers in the short run I caution the industry to slow down a little and learn from our past, we do not want to a repeat of what happened, and some may argue still happening in various parts of the country, major loss of real property values and in some areas, a near-halt to the real estate industry.

Although it is very exciting to be back in action and very busy but when I start hearing about a $700,000 house escalated to over $1,000,000, way above appraisal, I get a chill down my spine.  When I hear of one property in the $600,000 range getting 47 offers and escalated by $150,000, I cringe.  When I hear about a $200,000 townhouse receiving 56 offers and escalated to $310,000, I get really anxious.  I know that as a Realtor we must strike when the market is hot but we also must do what’s in our client’s best interest.

Am I working in my client’s best interest if he tells me “get me this house no matter what, we LOVE it”, then I compete and work very hard and “win” the bid out of 50+ offers?  I have to say absolutely yes.  The trick is, if client wants to waive inspection, appraisal, financing, well/septic etc…,  I am going to make darn sure he understands exactly what he is doing, explain the potential consequences and advise them to seek legal advise if I feel it is appropriate.  And of course sign all the proper addendum and waivers.

So what is causing all this craziness??  Simply put, supply and demand.  Low inventory, too many qualified buyers competing for “precious few houses”.  So what is the solution? Some say major reform must still be enacted, in addition to what was already implemented.  Others say let the market decide, free market, supply and demand and long live capitalism.  I suspect both views are correct to some degree which simply means reality is somewhere in the middle.

At the end of the day, I am very happy the market is HOT, I just have a good memory and I am a little cautious!!  Happy selling my friends……

Great Player = Great Leader?

OK, so the latest buzz in the sports world is that Michael Jordan’s NBA team Charlotte Bobcats just earned the NBA’s worst losing record, ever.  Of course everyone is pointing the finger at MJ and asking “How can this be, he was the world’s best NBA player” or “MJ led the most winning team in NBA history in the 1990’s”.

So my question is, as it applies to not only sports but business; does being a good player automatically make you a good leader?  My feeling is NO; I have seen this over and over again in the business world where you have a top producer and the company decides to “promote” him/her into a managerial position, at which they fail miserably.  Or, a top sales person who then gets promoted to sales manager as a reward for their productivity, and again, fail at that job.

I have also seen where you have a Mega Agent who then turns Broker/Manager only to see the business fall apart quickly.

Reason is they are two different sets of skills which require major development.  Now don’t get me wrong, some people do develop the two sets of skills, either simultaneously or otherwise.

So Mr. MJ was a great player, some argue the best, but did he really posses the necessary skills to run a team?  You be the judge!!

Say Goodbye Low Ball Offers?

So what is a low ball offer anyway?  Is it 10%, 20% 25%, 30% below list price?  Well that all depends on whether the list price is comparable and realistic of course.  Another factor is inventory, basic supply and demand.  Let’s assume the price is competitive with supporting comps but inventory is tight, as it is now in certain parts of Northern Virginia, especially in the $400,000 and below price range.  In that environment, even 10% below market or in some cases market is low ball.

We find ourselves back to multiple offers, escalations clauses and tight inventory this spring and yet we have some buyers who still think they can steal a house and they want us to be their accomplice!!

Not that long ago an offer, any offer, was considered great news, no matter how low!  When a property hasn’t had any offers in 3 months and one comes in, it was still better than the offer we had “yesterday”, which was none of course.

Bottom line is, current market conditions have no place for the “low ballers”, even short sales and REO’s are demanding and getting close to market value.

Educating the consumer has been the challenge for some of us but we must continue to arm ourselves with statistics, articles, trends, data and numbers.  Let the facts speak for us!

HAPPY SELLING!!

Short Sales – New and Improved?

Recently, the 800 pound guerrilla Bank of America along with Fannie Mae and Freddie Mac announced their own versions of processes they think will streamline the short sale process. BofA is  now requiring their loss mitigation divisions to reach a decision on a short sale in less than 3 weeks.  That is a very aggressive goal and way less than the national average of 306 days in the fourth quarter of 2011

Fannie and Freddie starting in June are requiring servicers to make a decision on a short sale within 30 days of receiving an offer or an application package from the borrower.  If the GSE cannot make a decision that quickly, they can have more time but must provide the borrower with a weekly update and come to a decision no later than 60 days.

Again, very Big goals or some would call it a BHAG……  Now I have several questions which remain unanswered; I don’t know if they have answers but, 1.  who is going to oversee this?  2.  Who is measuring the performance?  3.  Are there any consequences to exceptions?  4.  If so, what are they?  In other words, is this somebody’s dream of a perfect short sale world?  

I applaud BOFA and the GSE’s for at least trying to make things better and I hope it does, I am the first one to cheer this change, especially since as a Realtor, part of my income in dependent on it, I just wonder how realistic it is to go from a national average of 306 days to 21, 30 or even 60 days.  Now in fairness, I have seen some major improvements in approval timeline lately, I have seen short sales approved in 30, 45 and 60 days but those occurrences remain the exceptions rather than the norm, I hope that’s about to change!

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New Year’s Resolutions vs. Goals

As we say goodbye to 2011, most of us are contemplating what happened to us this year and what we would like to see happen next year.  I for one am not a big fan of new year resolutions, I have found they do not work for me.  What does work for me is setting annual goals that are backed up by action plans.

As I set my goals, I work backwards, meaning the big picture is the end-result and a daily, weekly and monthly action plans and smaller goals are set, all leading to the realization of the end-result.  I apply this to personal and business goals

I came upon this great article I wanted to share with you, it talks about things I need to stop doing to myself.  Some of the items and behaviors on there are going to become personal goals for me next year, except written in a positive manner (will do) rather negative (not do).

Enjoy the article my friends and have a happy, prosperous and healthy near year!

Here’s the link:

30 Things to Stop Doing to Yourself.

Short sales have been around for a long time, I remember in 1994 when the Northridge quake hit the San Fernando Valley area of CA, thousands of homes were damaged and many were destroyed. As homeowners struggled to return to their homes or find new housing, lenders knew they were in trouble.

At the same time, homeowners stopped making payments on homes they can no longer live in or homes requiring substantial repairs, we are talking thousands and in some cases hundreds of thousands of dollars worth of repairs.  This left lenders with a dilemma similar to the one they face today, do they foreclose and take back homes that have little value or do they work with home owners on keeping their homes or selling them at a reduced price, hence short sales.

A short sale is a bona fide (real deal) transaction between a buyer and a seller, ratification takes place between buyer and seller, just like any other contract with one major exception, the short sale contract is subject to lenders approval.  Buyer gets clear title to the property.  Strictly from a technical standpoint, a short sale transaction is no different from any other as far as a buyer is concerned.  Perhaps all the delays and lender counter offers beg to differ but once again, buyer eventually gets clear title to the property, so with that out of the way, let’s talk about the seller.

Seller on the other hand has a problem!  The contract presented by the buyer does not generate enough funds to pay off the seller’s loan(s) against the property.  The seller then makes an appeal to the lender to accept less money than what the lender(s) is owed.  If the lender agrees and a sale takes place, that transaction is called a Short Sale.

So we all know by now the word short in short sale does not define the length of the transaction, but rather refers to the payoff made to the lender.  In fact, that’s where the term Short Sale comes from, the payoff to the lender is short.  Short Payoff

Future blogs will address all the potential risks to sellers doing a short sale ranging from deficiency collections and suits to phantom taxation.

Contact me for more information 540-313-2116

The average November 2011 SOLD price of a property in Loudoun county rose 2.27% over October 2011. The Days on Market or length of time it took to sell the property in November went down almost 7.5% compared to October. Median price went up almost 1% in November compared to October.

Market Conditions

November Stats For Loudoun County

www.NoVaRealEstateProfessionals.com

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