A Real Estate Discussion Blog

As a first-time homebuyer there are so many fantastic programs to help make a home purchase a reality.  You only get to be a first time homebuyer once, so please research all the programs available to you! 

City Mortgage(Chicago) - The City Mortgage program offers qualified first-time homebuyers 30-year, fixed-interest mortgages at competitive interest rates and a gift of 4 percent of the mortgage amount to cover down-payment and closing costs. See website for income and purchase price restrictions. 

IL Housing Development Assets IL Homeownership Project- In Sept 07 this project was created to help up to 850 in IL to become first time homeowners. The Assets Illinois Homeownership Project funded by the Illinois Department of Human Services (IDHS) will offer a dollar for dollar up to $2,000 match in a structured savings account to help individuals save for the purchase of their first homes and build equity for the future.

Illinois First Time Home Buyer Grants - Cook County residents can be eligible for up to $5,000 in grant money through this program.  Visit thier websiteto read about eligibility and approved lenders. 

Our Home Program- This programs is offered by the Illinois State Treasurer's Office and helps people purchase their first home, refinance a mortgage or modify a loan if they are facing a financial hardship outside of their control.  If you are close to getting a conventional loan but can't because of a situation like bruised credit, lack of down payment or have a high debt-to-ratio , this program could be of help.  You must be a IL resident and taxpayer and have a household income of less than $75,000. 

USDA Illinois Gauranteed Rural Housing Loans - Guaranteed Rural Housing Loans are available to assist eligible households with incomes that do not exceed 115% of median income for the area. The program provides up to 100% financing for moderate-income applicants. This eliminates the need for down payment and private mortgage insurance. Customers receive competitive 30-year loans with fixed interest rates. They work with local community lenders, using conventional lender's forms and receive quick service.

IL Housing Development Authority- This organization helps low and moderate-income families become first-time homeowners through varies programs.  They offer lower-than-market rate down payments to first-time homebuyers or those who haven't owned a home in the past three years.  One of the programs they are piloting now is the 40 year note, to help with affordiblity.  They also offer programs for households that demonstrate that their monthly income doesn't exceed 80% of area medium income.  Visit their website for a complete list of programs and participating lenders.

Public Safety Officer and Teacher Homeownership Incentive Program- If you are a Chicago police officer, fire fighter, paramedic or public school teacher you could be eligible for up to $7,500 in assistance when purchasing a home. 

TaxSmart Mortgage Credit Certificate- Any person who has not owned a principal residence at any time during the three years prior to closing a loan under this program is considered a first-time home buyer. Non first-time home buyers are also eligible if they purchase a home in a designated target area.  TaxSmart is a Mortgage Credit Certificate (MCC) program that provides a federal income tax credit to qualified homebuyers.  Under the program, a home buyer would receive an MCC to reduce income taxes by an amount equal to 20% of the interest paid on a mortgage. The tax credit may be claimed each year the home buyer continues to live in a home financed under this program.  See website for income and purchase price restrictions. 

There are many programs out there to assist you in your first home purchase.  Make sure you throughly research the resources and work with an educated Realtor and Lender. 

I'll admit upfront that this post has nothing to do with Real Estate.  However, it does have to do with one of my other favorite subjects- SHOPPING!

Black Friday (the day after Thanksgiving) is one of my favorite days of the year.  I'll fess up to being one of the crazy people that is in line to get into the mall at 5 am.  A few years ago, along with Black Friday, Cyber Mondaypopped up.  I think at first it was sort of a gimmick to get people to shop online.  But in the last few years it has grow some legs and stores are now offering some really great deals online.  It is said that today is one of the heaviest online shopping days of the year. 

So, in case you aren't finished with your Holiday shopping... OK, in case you haven't started for some people.... check out http://www.cybermonday.com/ to see some of the great deals you can get today! 

Happy Shopping!

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"Permission marketing" is a common marketing term that we have all heard time and time again.  As Realtors, we have all been trained to ask "do you mind if I include you on my mailing list".  Is there still value in building a database?  Definitely.  Is there still value in asking this?  Of course. 

The other day I sat through a new Realtor educational session where building a database was taught as being one of the most four valuable things you can do as a Realtor.  The words "permission marketing" were cavalierly thrown around throughout the presentation.  The trainer was someone who had been in the business for over 20 years and said handing out your business card and building a database was the lifeblood of a Realtor's business. 

I sat back, listened and took notes, like a good student.  But I got wondering... how important is "permission marketing" going to be in the near future?  Will using this term one day make you sound antiquated?  Is a statement like this going to be like saying 25 years ago that the MLS book is the lifeblood of a Realtor's business?  I think so.  

With blog subscriptions, feed readers, and social networking sites that don't operate on an email platforms, how relevant will "permission marketing" be?  Today, I don't wait to be asked as to whether or not I would like to sign up for a newsletter.  I am the one that goes and seeks out the information I want to receive.  I am the one that organizes my feedreader to get the blog content I am interested in reading.  I am the one that allows people to join my social networks and be a part of my planning and decision making.  I am the one that decides which widgets I want to download.  I am the one that reads and writes customer reviews.  No one asked me if I would like to receive their information, I go out and find it on my own. 

Maybe the question isn't "can I add you to my newsletter list" anymore.  Maybe the question is "do you want to join my network or a group on facebook" or "be friends on MySpace" or "get connected on LinkedIn" or "subscribe to my blog". 

Doing these "permission marketing" activities, such as sending out a newsletter, ensures that the recipient will hear from you at regular intervals.  Joining up in a social network or subscribing to a blog means that the relationship advances to where two parties are entwined into each other's lives, quite possibly on a daily basis.  It moves from situation where you are pushing information out, to one where the client is pulling information into their world and relationships are created, verses just having information digested. 

I think "permission marketing" will continue to have its place and won't completely go away.  But I do think it will evolve and be renamed.  Now if only I could think about what the name is, coin it, and become as rich and famous and Seth Godin!  What do you think the next big marketing buzzword to replace the permission marketing phenomena? 

I often get asked how investors can use Zillow.  With a database of over 70 million homes, one of the best ways to use the site is to evaluate trends.  Each quarter Zillow organizes this data and releases it at a link that can be found at the very bottom on the Zillow home page.  Below I will highlight some of the national trends for the July-September 2007 data that was just released, but you can follow the link to find data for your specific area. 

• National home values declined 5.7% year-over-over. 
• This is the 4th consecutive quarter decline and the largest decline in more than 10 years.
• The US Zindex is $244,000, down 2.8% from the previous quarter.  This is the median of all Zestimates. 

For the first time since releasing these reports, we analyzed these numbers compared with mortgage information on record for the home.  While we all know that real estate cycles up and down, these numbers were a little more scary to me.  However, the numbers illustrate why is it always ideal to have a long term strategy when doing any this of investing. 

• 15.6% of those who bought within the last year have negative equity.
• 17.5% of those who bought within the last 2 years have negative equity.
• 1.8% of those who bought within the last 5 years have negative equity.

Despite these situations where homeowners could be upside down, there is still a strong case to buy real estate as most homeowners still have positive equity in their homes.  In fact, many that have purchased in the last two years have seen some sort of equity increase.  This increase or decrease in equity depended on factors such as when the home was purchased, down payment amount and net market appreciation. 

• Homeowners who bought within the last 2 years made a median down payment of 10% and own 13% equity share in their home.
• Homeowners who bought within the last 5 years made a median down payment of 11% and own a 41% equity share in their home, stemming from a annualized rate of 9.4% each year. 

Basically these numbers prove what you as real estate professionals already know.  You should encourage your clients to make smart real estate investments that are within their financial capabilities and goals.  And if you are going to get into the real estate game, the best strategy is a long term one. 

For detailed numbers in your area, click HERE. 

At the NAR convention I attended Oliver Frascona's session on the 6 D's: Discover, Disclose, Damages, Defendants: Daily Decisions.  I know, sounds boring.  I think he needs to work on a catchier title.  I signed up for this class solely to get continuing ed credit and not expecting much.  However, this turned out to be one of my favorite sessions I have ever attended at a NAR convention. 

If you ever get a chance to hear Mr. Frascona speak, you should go primely for the entertainment value, and secondly for how much you will learn about mitigating risk and legal issues.  Yes, he is a lawyer.  But yes, he was so funny and I learned SO much! 

Example of how he made the boring subject of the fiduciary duty to a seller not to disclose their motivation for selling.  Sample conversation on how to answer the "why are they selling question" (which fyi- you SHOULD NOT answer). 

Buyer Agent- "So why are your clients selling?"   Seller Agent- "They're moving"

BA- "Haha.  No really, why are they selling"  SA- "Because they want the money more than the house"

BA- "Ok, you aren't going to tell me.  But whey do they need to be out of the home?"  SA- "One day after closing". 

He also discussed at length whether or not you need to disclose:

• A half way house down the street
• A known sex offender living in the neighborhood
• Noisy neighbors
• Ghosts in the home
• Murder or suicide in the home
• If the house previously was a meth lab

In case you are wondering the answer to many of these bullet points- a very general rule of thumb is "They (seller) Decide, You Provide".  If you still aren't sure, the next general rule to follow is "If you know it, you must disclose it". 

Mr. Fascona also spoke at length on dealing with home inspectors.  His general message here was, don't get involved.  You are not a home inspector, so don't play one.  The less you know, the less risk you are carring from a disclosure standpoint.  A couple points here he recommended:

• Meeting the home inspector at the home is fine, but whatever you do, DO NOT walk the house with them. 
• Do not be the one to rely any information found to the seller.  Arrange for the seller to speak directly with the inspector. 
• If you have to be there, buy a box of cookies before you go, so when you meet everyone at the home they are all happy to see you.  Then sit your butt down at the kitchen table and eat as many of them as you can while everyone else walks the home. 
• If you see something you think the home inspector missed, first remember that home inspection is NOT your job.  But if you think it is a big miss, say something like, "are you sure thoroughly checked the roof" and in more severe cases, recommend that the seller get a second opinion (not yours).

Overall, this was a great session and highly reccommend it.  You can also receive 3 CE credits for attendance.  It really opened my eyes to how much risk Realtors have to get sued, even when simply trying to help and provide service.  Spending three hours in this class could save you hours and a lot of money in court. 

Going to NAR's convention in Vegas and want to learn how to use Excel?  No problem, attend the class on how to use Excel.  

Need to learn more about how to market luxury properties?  No worries, there was a class on that too. 

You hear a lot about this thing called Web 2.0 and want to know more about it?  Take your pick from the three or four classes on this topic. 

Want to start blogging and need to know where to begin?  Sorry.  You are out of luck, no classes offered for this particular topic.

Huh?  Wouldn't this be an obvious choice of a class topic?

I give NAR credit for offering a wide array of classes with some very interesting speakers at the Convention last week in Vegas.  Some of the sessions I attended were pretty good.  Most of the sessions I personally went to dealt with internet marketing and 2.0 concepts.  In each of the sessions the rooms were packed, telling me that Realtors have a huge desire to learn more about how they can better market themselves in this 2.0 world. 

Of course blogging was mentioned intermittently throughout various sessions, but it was obvious by the questions that the audience asked that they could have used a blogging primer before launching in to the more involved 2.0 concepts which each speaker discussed.  For example, a larger broker spoke of all the leads that they were getting through their blog which they had integrated into their corporate website on which they inserted numerous links moving the consumer around their website.  Next questions from the audience- how do you get a blog? 

The obvious omission of a blogging class seemed almost intentional to me by NAR.  Why would they do this?  For the last year NAR has said that it is going to explore how much it wants to regulate blogging.  "We tabled the Internet-related issues...blogs to name a few until November.  The subcommittee will be looking at Article 12 to see if we need a broader more encompassing ethical direction guiding all forms of communication."  

I don't know where they landed on this issue yet.  But by ignoring the issue until they make up their mind is handicapping Realtors in utilizing a marketing technique that could be making them money today.  Let say they make a decision this month on these Blogging issues.  It is going to be another whole year before next year's convention when the topic can be discussed to their satisfaction.  Think back to how much you knew about blogging one year ago.  Can you imagine where it is going to be in another year!

I think by not offering any basic b classes this year, a huge gap in the people who get it and the people who don't will be created.  There are those that have fully embraced blogging and will be able to grow with the medium as it grows. And there are those who don't have a clue right now and without a basic education today, are going to continue to left behind even further. 

(image courtesy of Maxine for Hallmark)

Today an article was posted on RealtyTimes.com entitled Can Realtor.com Make Money? by Blanche Evans. 

Overall, it was a great recap of the history of Move.com (formerly Homestore) and an interesting question to ponder.  Ms. Evans does a good job laying out the facts, as only she can. 

However, there were one quote in the article that I specifically wanted to address, as I found it to be quite infuriating.  It was quote by Steve Cook, former Vice President of Public Affairs of the National Association of Realtors and today working with Alan Dalton on a top-secret project at Move. 

Steve says, "Zillow is private, so you don't how well they are doing. Their plan was to disintermediate the Realtor. Now their plan seems to be to build listings and traffic and become an advertising portal, and now they're getting into the mortgage business. Our model is different from theirs. We sell enhancement and marketing tools to Realtors, not advertising."

Let examine the pieces of this statement. 

Zillow is private, so you don't how well they are doing - True.  And this is a benefit of being a private company. 

Their plan was to disintermediate the Realtor. - It NEVER was the plan.  And it NEVER will be the plan.  Buying real estate is not like buying an airplane ticket.  It is not something that can become a commodity, easily bought and sold by computers online. 

Now their plan seems to be to build listings and traffic and become an advertising portal-  Selling advertising was always the plan.  We are a media company.  We have always intended to have listings on the site, however the way we have gone about has shifted over the past 12 months, based on Realtor and Broker feedback.  When we initially launched the ability upload listings for free on Zillow, it was a manual one-by-one process.  Of course Brokers that have a large number of listings said this was an unacceptable way for them to use Zillow as a marketing platform.  So in response to this we built a bulk upload tool, which is being launched next week.  Prominent brokerages such as ERA Real Estate, Remax Allegiance and United Country are a few of the first Brokerage listings you will see online. 

and now they're getting into the mortgage business-  This is the only statement we have ever released about our intent to work with Mortgage Professionals.  While I can't divulge a lot information about a soon-to-be-released opportunity for mortgage professionals, I can say that it will be consistent with our goals as a media company.

Our model is different from theirs. We sell enhancement and marketing tools to Realtors - Yes, your model is different than ours.  We GIVE AWAY enhancements and marketing tools to Realtors. 

not advertising...  - Ummmmm.. I wonder what he calls those large rectangles at the top and sides of the pages that read "LaSalle Bank" and "Sheraton"?  Come on Steve, those look like ads to me.  And I have seen ads Realtor ads on the site as well. 

What is infuriating about this statement is that various leaders at Zillow have said time and time again that it is in no way our intention to disintermediate the Realtor.  Steve knows this and yet he chooses to irresponsibly relay this inaccurate information to the Realtor community.  A community that used he to represent as a leader at NAR.  To perpetuate these inaccuracies about a tool for Realtors to use to make more money and sell and list more real estate is of poor character in my humble opinion. 

Second opportunity to attend this popular Blogging and Technology Seminar in Grand Rapids, MI.  Lola Audu the first of these two seminars was held last October 25th and it was a big hit!  The second and final chance to attend is this Wednesday, November 7th from 9-12a. 

Read more about what people said about the last seminar here- http://activerain.com/blogsview/250843/Blogging-Seminar-A-Glimpse 

If you attended on the 25th and wish to hear the content again, bring a friend and there will be no charge for you to attend the second time.

Hope to see you there!  

Continental breakfast will be served. 

This week I had a horrifying experience.  I videoed taped myself giving a presentation and then watched it!!!  While it was extremely painful to watch, it was extremely helpful as well.  It is an opportunity to take notice of things you don't often think about while speaking, the finer points of presenting. 

One of the big things I learned by the process is I can benefit by using more definitive language in an effort to become a more confident speaker.  I am told this is an issue that is more common among women than men. 

To illustrate what I mean, let's use a Listing Presentation as an example.  

"I think we should list your house at..."  vs.  "It is my recommendation that we list at..."

"I'll try to explain how I got to this price..." vs. "I will explain..."

"Hopefully after this presentation you'll use me" vs "After this preesntation, I think you'll agree that I am the best person to list"

Power robbing words to eliminate:

Ø I guess

Ø I hope

Ø Probably

Ø I think

Ø Maybe

Ø Kinda

Ø Sorta

Replacement words:

- I will

- I recommend

- I urge

- I would like to suggest

You can be the most qualified Agent in the world, but when these word slip into a presentation, they can detract from the power of a presentation.