Gary Woltal's Blog

Connectivity is the new buzz phrase in technology. Being connected - with data, voice, video, anwyhere, anytime is what's happening. Which begs the question when working with REALTORS, have you asked, "Is my agent mobile?" Do they embrace the latest in technology to best serve the client?

Much mobile technology is available these days to keep a face in front of the customer and out of the office. Combination personal digital assistants / cell phones (Blackberrys, Treos, Blackjacks, iPhones), wireless laptops with WiFi or Aircard connections are everywhere. The ability is there to send and receive text messages. Mobile versions of contact managers / CRM software like those from Top Producer abound.

Is all this stuff really necessary? It can be and it also can be information overload. In the days of the hot California real estate market new MLS listings were downloaded as hot sheets from the REALTOR'S farm area to their PDA. Conference calls out in the field on cell phones were commonplace. Many realty offices don't even have long distance anymore, instead relying on cell phones. High speed internet access is expected. YouTube videos of your home started appearing on web sites.

Proper application of technology as a TOOL to assist a client in buying or selling piece of property is where a mobile agent becomes valuable. Just because they have a portable Global Positioning System (GPS) system doesn't mean that the agent with the foldout paper map isn't the better agent. But the world is communicating more and more in the wireless realm. Watch your local agent closely. They are probably pretty much untethered these days.

From New York Times reports they say from Jan 2003 to Mar 2006 mortgage companies, homebuilders and contractors added 1.3 million jobs to the economy or about 23 percent of all jobs created. From that point on housing category jobs have lost 383,000 jobs while the rest of the economy added nearly 3 million jobs.

One can only imagine that the bloodletting in the housing industry is just beginning. From the real estate agent standpoint it looks like a thinning of the herd is about to take place. For those agents serious about their livelihood and who have a passion for the business, they need staying power. Ideas in this area:

• veteran agents can work their referrals harder and probably increase share
• newer agents can "survive" with a spouse's income or a counter-cyclical parallel income stream
• all agents who will remain can hone their skills with more education and sharpening their contact with their sphere by cleaning up their databases and focusing on helpful marketing ideas to clients and prospects
• expense control will have to be closely monitored and adjusted by agents and brokers alike. What really is the return on your investment?

Like a forest fire clearing way for new growth this thinning process is probably overall good for the industry. Those that love the field of real estate will still be around when the trough of the downturn turns upward again. They are too smart to be pushed aside. They will adjust their business models and find a way to make it work. They've always been the type to make things happen and not let things happen to them.

Weekly we hear about large losses by homebuilders and the lender institutions. A bright spot today for the $200,000 and lower loans may be FHA. In the past FHA loans were thought of by most as having tough requirements to get the insured loans. You may need to revisit with your favorite lender and take another look.

For the target of first time homebuyers, divorced individuals, $200K and below housing, natural disaster victims, those with credit risk, the emerging Latino/Hispanic market, and non-permanent resident aliens FHA loans may be the solution that will work for you. FHA loan limits are set by county so check locally. They have fixed and adjustable rate plans. The down payment requirement is 3% but there are also down payment assistance programs like the non-profit Nehemiah program that can help.

FHA does not impose a minimum FICO score. They can work with a borrower with NO credit, a history of derogatory credit, Chapter 7 and 13 bankruptcies, and foreclosures. FHA no longer requires plans and specs on new construction that is 90% complete and are easier on the termite inspections. If you're flipping houses you will have to wait 91 days to apply from your original purchase.

If you think subprime and B paper have dried up and you are scratching your head working with your buyers, talk to a lender and explore FHA financing. It may be the solution you've been searching for.

They say when you make a misstep that is a mistake. When you do it again it is called experience. The reason I bring this up is a tip I have learned in buying in the new construction category. Before plunking your money down on a house in a Master Planned Community get yourself a map. Also check with the local city Planning and Economic Development Board along with the state highway department. You need to be aware of commercial zoning around the residential areas as well as future highway expansion. A very good online mapping tool is Google Maps. It will show you the general lay of the land and the roads. You can zoom in and out and drag the map around. While not always up to date including its satellite imagery, it is a good start.

Myself and others I have known in new construction areas have built early into the development. That commercial zoning could end up being a two story paint store in your backyard. The quiet backyard you envisioned with your pool could have the roar of traffic from a six lane highway someday. It does happen and your lifestyle suffers and values plummet. Retail follows rooftops but so do roads.

Be a smart cookie. Check it out. Don't listen to scuttlebut from the new home salesperson. A great REALTOR can point you toward the resources. You then will enjoy your new home for many years to come.

In recent months there has been much negative press surrounding the housing industry. As the REALTOR portion of that industry I think it is time to pause and reflect on much that we have to be grateful for:

• we are independent contractors running our own businesses
• we set our own hours
• our creativity and branding are determined by us
• we control our marketing budgets
• we decide what our business focus is on and who we will work with
• we are contributing to society's greater good through our practiced and learned skills
• by nature we are risk takers which gives us the opportunity for great rewards
• in all economic cycles we can adjust our business model to suit the conditions
• we are privileged to interact with so many diverse clients and partners
• we have one of the BEST kinds of work among many to choose from
• above all we have a passion for this business and the fine people we work with everyday

For all those REALTORS, residential, commercial, or investment, seeing the glass half full rather than half empty and seeing the blessings you DO have gives you great perspective. Being grateful is one of the keys to happiness.

I am dumbfounded at times at the general lack of awareness many people have about representation by real estate agents. Some I talk to say they just call the agent on the For Sale sign. Some have never even heard of the term "buyers agent." Many states now have mandatory Information About Brokerage Services disclosures to help inform the public about agency, buyer, seller, and intermediary.

The short version of the history of the Buyers Agent from inside the real estate agent world went something like this. "Buyers are liars." That meant if the buyer didn't sign the agent up to exclusive agency the next day they were off seeing houses with the next agent they bumped into. There goes the commission! There may be some history to that little story but from the perspective of professional representation, here's the truth. The listing agent on the sign represents the seller and their interest, not YOU Mr. or Ms. Buyer. Yes, they want to sell the house, but they are not looking out after your interests.

Like hiring your own attorney, smart buyers need to hire buyers agents. If you feel uncomfortable with not being able to get out of an agreement, sign a short term one or work with a friendly agent who has an easy exit clause. The wonderful benefits of a buyers agent to you include:

• They represent YOUR fiduciary interest.
• They wll HELP you find your ideal home (email searches, new listings, new construction, making appointments).
• They will make offers and negotiate on your behalf.
• They will take the contract to close (inspections, escrow, closing)

Actually, I'll say WHAT A DEAL, because in most cases the SELLER pays for YOUR agent. It is SMART to have a buyers agent represent you. Find one that is compatible with you, and HAPPY HOUSE HUNTING!

I always personally had a hard time believing that buyers determine the price of your house. The reason this mystified me was because I thought for example in a strong sellers market with limited inventory the seller could get multiple offers and trump up his price pretty much as high as it could go. But it is really the economic principle of supply and demand together with competition.

The reason buyers determine what is "fair" for a particular piece of property is because they are the ones out shopping. If you do have equal square footage as other properties but yours shows well, is well maintained, has lush landscaping, higher end amenties, is more energy efficient, is from a higher end builder, buyers will recognize that (although some REALTORS tell me not all of them do). But the premium they will put on the "plus" house over others is all in their mind. Do they really care that much that your air conditioner is SEER18 rather than SEER10? Do they really care that you have a marble tile foyer vs. ceramic tile? Do they really care that your cedar fence was built last month vs. one down the street that is five years old? The answer is MAYBE, or MAYBE NOT. It depends on that particular buyer, or the next one that comes along.

Buyers, in the end, decide which house offers them the maximum value for the price. They would like a steal (wouldn't we all?), but they don't expect it. What they want is what's fair and affordable to them. Buyers decide price.

This topic is a little more on the title company or lender side than my background in real estate but since the closing is where it all comes together I thought I would shed some light on it. In applying for a mortgage there is a federal law that requires lenders to provide buyers an itemized "good-faith"estimate of their closing costs. The good faith estimates are just that, "estimates."

This is all well and good but I have heard along the way two things that seem to upset buyers prior to getting to the closing table. First, a buyer should be able to review all the paperwork at least one day prior to closing including "actual" settlement costs. This is more often than not, NOT the case with title companies. And two, a sense of shock that the final closing costs are substantially different from the estimate. I hear the main culprit here is the pricing on the various title insurance policies that end up needing to be paid. Other charges come into play like charges for attorneys, termite inspections, pro-rated items like homeowners insurances, dues, and taxes, etc. They say the original good faith estimate won't be to the penny or even the dollar but how about thousands of dollars off?

I think to head this off, lenders, title companies, and the REALTOR need to be in close communication to avoid surprises at the last minute. In today's electronic age there's no reason all the paperwork cannot be ready a day or two ahead of time. It all comes down to the relationships between the parties. Some are great while others are just fair.

As a home buyer client in the past who looked at too many houses in person and not from virtual tours or the Internet, I can relate to what I call the "Match Game." Buyer Agents are tasked with inputting Buyer requirements into the MLS and seeing what pops up. You know the drill - Four bedrooms, three baths, 1/3 acre lot, 2 car garage, No pool, blah, blah, blah. This idea of playing matchmaker to current inventory only goes so far. From someone who looked at too many houses over too much time as a buyer myself, there needs to be a complement to playing Matchmaker.

The reason I bring this up is because I did learn that THERE IS NO PERFECT HOUSE. Even when I built my perfect house it wasn't perfect. The builder told me so. The complement to playing the Match Game is to decide on the five "Must Haves" in the criteria. They may change as you see neighborhoods, landscapes, shopping areas, but add the five "Must Haves" and you will winnow things down quite a bit.

The reason the Four bedroom, three bath approach doesn't work all the time is a word called COMPROMISE. Sometimes you will as a buyer take a smaller backyard to be in a better school district. Sometimes you will drive further to work so that your house out in the rural subdivision can provide you with the treed backyard you've always dreamed about.

Flexibility is the key to REALTORS and clients playing the Match Game properly. That, and quite a bit of searching online before loading up in the car and heading out. AND a knowledgeable REALTOR that knows the inventory. I would say a very valuable "enhanced" service of a great REALTOR is the ability to play Matchmaker to the hilt. Zeroing in on the correct properties in the minimal amount of time. It takes time to be good at this game. But one who hones their craft gets better at it each day.

Talking with first time homebuyers the common question arises, "Is it better to rent, or buy?" I have always been fair with this question while I think REALTORS and financial planners alike are heavily on the side that buying is better. There is no question there are many advantages to home ownership.

Tax Savings: Interest and property tax are deductible on your Federal Income Tax return

Equity buildup: Your prinicipal is reduced over time growing your net worth (your personal wealth)

Investment: In a stable or growing market the home will appreciate in time (not guaranteed)

Pride of ownership: The property is yours to add on to, design, and enjoy with family and friends.

There is indeed a "cost of ownership" as well for the new buyer. Buying lawn mowers, trash cans, window treatments are not free. Paying homeowners dues and homeowners insurance is money out of pocket. What about new furnishings and home maintenance? Never underestimate all the new bills you will have. There is also that first cost of coming up with a down payment if you need one to get the house.

On the other hand, the advantages to rent to me come down to two things: time and lifestyle. Are you going to live there less than two years? To me that is a no brainer for renting just looking at the financial side. I CANNOT tell you how many people buy a house and move out in less than two years. With a closing on each end, and sometimes being in a depressed housing market, it's CRAZY. Second if you are a mobile person and don't know where you want to live, or want to have a lease run out and do something else, it makes perfect sense to rent. As a matter of fact I think you are a GENIUS with matching your lifestyle with your housing need. Also, maintenance can be someone else's problem.

So for all you renters out there - figure it out for yourself and stop listening to those financial planners. If they are all so smart, why aren't they living in million dollar homes? Renting has its place in society depending on your stage in life and your need for flexibility. BTW, REALTORS can help too, with finding you a place or putting yours up for rent. So give us a call too!