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Agent Incentives: What works - What doesn't

Some home sellers believe that offering a bonus to a buyer's agent will help sell their home. They offer all kinds of incentives to Realtors in hopes that it will give them the extra edge over other homes. Here are a few examples of incentives I've seen offered to agents in the past couple of years:

• Bonus Money. Often $1,000 to $5,000. These don't attract as much interest as you might think. Sellers are probably not aware that the buyer's agent is required to disclose this bonus to their clients who will likely want it reflected as a discount to their purchase price instead of a bonus to their agent. The seller might as well offer a price reduction. I've never kept the bonus incentive and have passed it on to my clients when legally possible. Any monetary bonus a buyer's agent actually receives will be shared with their broker.
• A Trip. Builders selling new construction sometimes offer these to agents who sell more than 1 of their properties. But usually the buyer's agent is entered in to a drawing for a trip along with other agents selling their properties. The odds aren't good enough to make most agents drive people to that particular builder. But at least the agent doesn't have to split the trip with their broker. So a trip is often more enticing than cash to an agent.
• An ipad. This is a popular incentive right now. But if I really want an ipad, I may already have one. If I don't, this isn't an incentive. And like the cash offer, it must be disclosed to the buyers - who may expect something as well.
• Weird stuff - the strangest one I've seen was an offer of an Arby's coupon for a discount sandwich to agents who brought their clients to see the home. Or maybe it was the offer of a scented candle that one home was trying entice agents with. Realtor events and giveaways are one way to attract agents in the door. But requiring an agent to schedule a showing and bring their client in order to receive a puny prize is a waste.

The truth is that none of these agent incentives works well. If a property fits my clients' needs, then I'm going to show it to them. If it doesn't, then we probably aren't walking in the door. None of the incentives I've ever seen has been enough to encourage me to sell my buyers a home that they wouldn't otherwise want.

What works? The property is in the right location, the right condition and at the right price. It is presented well in the MLS, on-line and in person. AND it is easy to access. That is what will make an agent want to sell your property.[where: 75230]

What do you Want from Me?

Most of you want help just finding the right house according to the Dec. 2011 survey conducted by the National Association of Realtors and compiled by the Texas Association of Realtors.

When asked what they want more from real estate agents, Texas buyers said:

• 47% Help find the right home to purchase
• 14% Help buyer negotiate the terms of sale
• 12% Help with the price negotiations
• 10% Determine what comparable homes were selling for
• 6% Help with paperwork
• 5% Help determining how much home buyer can afford
• 2% Help find and arrange financing
• 2% other

The survey asked Texas sellers what they want most from real estate agents. Here is how they ranked their importance:

• 23% Help seller market the home to potential buyers
• 22% Help sell the home within a specific time frame
• 18% Help find a buyer for the home
• 15% Help price the home competitively
• 14% Help find ways to fix up the home to sell it for more
• 4% Help with negotiation and dealing with buyers
• 4% all other responses

And another interesting set of statistics: What Texas home buyers said were the most important factors when choosing an agent:

• 26% Agent is honest and trustworthy
• 20% Reputation of agent
• 19% Agent is a friend or family member
• 14% Agent's knowledge of the neighborhood
• 14% Agent has a caring personality/is a good listener
• 3% Agent's association with a particular firm
• 2% Professional designations held by agent
• 3% other

While I can't beat out the family member, I fit the other requirements.

Interesting to note that the abilities listed in the survey of what people want in a Realtor aren't at the top of the list of the most important factors when they actually choose an agent. Honesty, trust, reputation and personal relationship come ahead of actual skills.

Funny Real Estate photos of homes for sale

I'm not saying these folks are upside down in their house, but

Ancient Greece meets modern Texas in this expensive place?

Nice photo, but what an odd combination of design.

How often do you see a motorcycle inside a $3+ million home?

[where: 75230]

Do Americans still want homeownership?

The American dream of homeownership is alive and well. More than half of Americans surveyed in a recent poll said that if their financial situation were to improve,  they would buy a home.

Coming in second on the list of wishes, 23% said they’d make repairs or improvements to the home they already have, according to the poll of more than 1,400 Americans conducted by the National Foundation for Credit Counseling Web site, http://www.debtadvice.org/.

Meanwhile, 17% of Americans polled said they’d like to upgrade their car and 9% said they’d take a vacation.

Dallas Home Sales Statistics

Unless you've been out of touch, you probably know that 2012 sales are up. Here is a more detailed look at the area Year-to-Date stats for single family homes:

Number of Sales:

Entire DFW area: up 20%
North Dallas (Northwest Hwy to LBJ): up 44%
Park Cities: up 19%
East Dallas: up 34%
North East Dallas: up 35%
Far North Dallas: up 29%

Average Sales Price:

Entire DFW area: 0% change
North Dallas (Northwest Hwy to LBJ): up 3%
Park Cities: down 4%
East Dallas: down 12%
North East Dallas: up 7%
Far North Dallas: down 7%

Pending Sales (homes under contract) are up 25% in the metroplex. Homes priced under $700,000 have the least amount of inventory of available properties for sale.

But the year is still young. Unless more homes come on the market, we may see the number of sales drop and the prices rise.
[where: 75230]

Lots of Home Buyer Needs in Dallas

Every day for the past 2 weeks I've heard requests from multiple agents about their buyer needs. Buyers are looking for homes to buy in Dallas but the inventory of homes for sale is lower than normal for this time of year.

You can hear the chuckles around the room when someone says they have a buyer looking for an updated 4 bedroom home with a pool in the Park Cities for under $850,000. Sorry but that ship sailed in 2011. Or was it 2010?

Showings are up! Sales are up! Buyer demand is up! But many sellers aren't playing while the home prices are still low. Sellers realize that the market is on its way back up and that prices will follow. So a lot of them are content to sit it out and wait. They are hoping prices rise quickly even though economic experts say they go up slowly.

We all want to buy low and sell high. If you are thinking of selling but have decided to wait, please realize that if you wait to buy when you sell ... the prices will be higher for you to buy then too. The bargains are being snatched up now - they aren't sitting on the market waiting for buyers.

The big question is - will interest rates still be low in the months and years to come? The lower the interest rate, the more home you get for your money. When you look at the payments on a 30 year mortgage, a 1% difference in your mortgage interest rate equals a 10% difference in price. [where: 75230]

Should you reduce the price of your home?

I'll be the first to admit that some homes take longer to sell than others because they are unique. I know, every house is unique. But I mean really, really unique. And unique in a good way. That means it is 100 years old with original details or it is valued over $4,000,000 or it is on acreage in the city,... that kind of unique.

The 99 percent of Dallas homes that don't fall into a unique category should sell in less than 6 months on the market. Regardless of how long your property has been on the market, 20 to 30 showings is usually enough to sell it. Those are in-person, made-an-appointment and looked-at-it-with-an-agent showings (not open house visitors or internet clicks).

If enough people have seen your home to buy it and they haven't, then the market is tell you something. They're saying 'We don't like your house enough to buy it at this price'

You need to reduce the price. Period. Whatever reason that you think it is worth more, doesn't matter. The buyers don't agree.

How much should you reduce it? It depends on how overpriced your property is. And how motivated you are to sell. That said, you should reduce the price 5% to 10%.

Don't be foolish like these people: (LP means List Price)

A tiny reduction just tells people that you aren't serious.

But on the other hand, think twice before you make a huge reduction like this:

or this:

A huge price reduction says you are desperate.

Don't leave money on the table, but don't be so greedy that you end up selling for even less after months and months of waiting. Reduce the price 5 to 10 percent and place it into a new price category so that a new market of buyers will see it

Listen to your agent, who should be telling you that 3 main factors determine if and when your property will sell. Price, Condition and Location. You can't change the location. So if your home is in nice condition, then that leaves PRICE. Lower it.

Favorite Dallas Roofer

Good, dependable and honest home service providers are a valuable asset for any Realtor whose clients need a recommendation. Lucky for you, I share the names of companies that do a great job for my clients. And I don't get paid or get benefits from recommending a company.

In order for me to use and recommend a company, they must first meet 3 basic criteria.

1. They must know what their doing and be good at it.
2. They have to show up when they say they'll show up, and
3. I must to be able to afford them.

If they don't meet all 3 criteria, I don't even think of using them.

For roofing, I like Rich Frazier with Frazier Roofing & Guttering. Their number is 817-277-3131 and their web site is http://www.frazierservices.com/.

When you contact a home repair company, let them know if your agent recommended them. Many know that in order to keep getting referrals from me, they need to keep my clients happy. And they do.

Four Tips to decipher Real Estate Headlines

Real Estate Market Soars! Real Estate Market Dives! Both these headlines appearing within days of each other sure can lead to confusion.

These two articles recently appeared 1 week apart in the Wall Street Journal. No wonder people feel so uncertain and are confused if the market is up or down.

However, one headline tell us that prices are down and the other that the number of sales are up. Those are two different statistical looks at the market. Remember that real estate isn't a weekly roller coaster ride like the stock market. Real estate is local and long term.



Here is an example of where looking at sales can be deceiving: Let's say a couple of $2 million homes sold on Monday in Preston Hollow. Then on Tuesday, a couple of $500,000 homes sold in Preston Hollow. Would you assume that prices in Preston Hollow fell by more than 50%? Of course not. But statistically, the average sales price DID fall. That's why we look at the market over a long period.

Here are 4 tips to accurately determine what is happening in our local market:

1. Look at the long term numbers. Like the example above, short term fluctuations are not an accurate gauge. Look 6 -12 months back to see the true picture. Even when the real estate 'bubble burst' in most of the country, it took months to see the change in the market.
2. Consider the type of property. Many statistics look at just single family homes. However, many include condos and multi-family properties. The markets for these properties are different and so are the statistics. And commercial transactions are an entirely different animal.
3. Keep it local. Are the numbers you are viewing national, state, metroplex, Dallas or neighborhood? While the market in other parts of the country affects us, it is only a ripple effect, not a tsunami.
4. Figure out whether the articles are talking about prices, the number of sales, the amount of inventory, the average days on market to sell, or something else.

So what is the real estate market doing in Dallas right now?

• Sales are up. That is the number of homes selling is up. A positive sign for the market as a whole.
• Pending sales are up. Expect to see that reflected in next month's headlines.
• Inventory (available homes for sale) is down. That will cause prices to start rising.
• Prices have been inching up - not soaring and not down - inching up from the previous year. If you've been waiting for the 'bottom of the market'. It has passed.  [where: 75230]

Ebby Halliday turns 101 !

The first lady of real estate is turning 101 this week with a benefit for the Ebby Halliday Elementary School in Dallas.

This amazing woman started selling real estate more than 65 years ago. She opened the doors and gave training and jobs to thousands of women back when few had careers outside the home. She continues to share her generous spirit as she comes to the office almost every day with a smile on her face.

How lucky I am to work with such inspiration. [where: 75230]

Real Estate Jargon - SS

SS in real estate language no longer just means the home has stainless steel appliances. It is now used to note that a property is a short sale.

A short sale is a a property that is being sold for less than what the current owner owes on the home. The current owner's lender agrees to accept an amount that is short of what is owed to them. A short sale requires bank approval. The bank will ultimately determine what price and terms they will accept after the contract has been signed by the seller. While the process has improved dramatically over the past couple of years, it can still takes months to close a short sale.

Not all short sales are alike. Some are much more likely to close than others. A 'pre-approved' short sale means that the seller has already met the bank's requirements to sell as a short sale. Usually the lender has already agreed to the list price (or a price very close to the list price). Once the seller has an executed contract, the lender will review it and make their determination. That can take a while.

The worst aspect of a short sale can sometimes be the seller. If the seller has not already completed the required paperwork from their lender, the process will not start until the contract is submitted. Unless the seller quickly submits and meets ALL of the bank's requirements for the short sale, the transaction can take months and months. Sometimes, the sale will not be approved because the seller doesn't qualify to short sale the property. For example, if the seller has the funds to pay the difference between the sales price and what they owe (but they don't want to pay the difference), the bank isn't going to approve the short sale.

Before a buyer makes an offer on a short sale (and certainly before you spend money on inspections or a survey), they should always determine if the seller has the bank's approval for a short sale and where they are in the process. [where: 75230]

Real Estate Market Update

It is commonly understood that the real estate market is not like the stock market. A real estate buyer doesn't look at the daily or weekly fluctuations. Most people don't buy and sell homes every few of months or even every couple of years. That said - the real estate market is behaving like the stock market and now sales are up, up, up.

Experts predicted the real estate market would slowly come back and that started last year. But in just the past 6 weeks, showings of homes for sale have increased dramatically. More homes have gone under contract in the last 4 weeks than is typical for this time of year. And sales are rising as a result. Inventory of homes for sale has increased at a slower rate, driving the demand even more. In other words, they are selling faster than they are coming on the market.

Here are a few single family home statistics (as of this morning):

North Dallas
between Midway & Central, Northwest Hwy & LBJ Freeway

Homes available for sale: 363
Average size: 4,593 square feet, 4 bedrooms, 3 baths
Average asking price: $1,311,840

Homes currently under contract: 75

Homes sold since Jan 1, 2012: 62
Average size: 3,603 square feet, 3 bedrooms, 3 baths
Average sales price: $719,832 (average asking price was $762,104)

Park Cities, Bluffview, Devonshire, Greenway Parks (areas south of Northwest Hwy)

Homes available for sale: 353
Average size: 4,074 square feet, 3 bedrooms, 3 baths
Average asking price: $1,715,110

Homes currently under contract: 96

Homes sold since Jan 1, 2012: 85
Average size: 3,590 square feet, 3 bedrooms, 3 baths
Average sales price: $1,082,843 (average asking price was $1,128,643)

[where: 75230]