Luring the Right Buyers

Whether you are a real estate investor and you want to use a ‘flip’ strategy or you are a homeowner ready to sell your home fast so you can take advantage of the current market to upgrade. Luring the right buyers is critical in this type of real estate environment.

With the federal tax credit of up to $8,000 and now with HUD allowing for the issuance of short-term ‘down-payment’ loans for those that qualify for the credit, a bevy of new buyers are hitting the streets. You can sell a home and in some areas you can sell it fast if you do the right things and deploy the correct strategies.

The Finer Points of Selling

As a seller there are some critical mistakes that you don’t want to make and there are some important things you can do to make sure that your home is above the rest. Learn the psychology of today’s buyer and you’ll achieve success.

Remember that people are nervous right now. They are willing, but reluctant, players in the real estate game. Most buyers understand that they can get a great deal but are still nervous about the economy. They also are ‘novice’ buyers and many don’t want to buy a home that needs a lot of work.

Understanding how to overcome these buyer’s objections and knowing how to create excitement and buzz is critical to getting offers and receiving a contract that is close to your original asking price.

Point 1: Create an Emotional Connection
It is all about that first impression. One thing that many people forget is that the front of the house is the first thing a buyer sees. Make sure you spend a little extra time creating some flair and excitement there.

It’s kind of like staging the inside of a vacant home (which we’ll get to in a moment). You want to focus on some key areas. Take care of the simple stuff. Edge the driveway and curb, Paint the front door and shutters, cut large shrubs back and replace dead shrubs. Add some color by planting seasonal flowers and ‘limb up’ trees with low hanging limbs so the house is visible from the street.

You can even move to the backyard and create a little outdoor living space by adding some lawn furniture. Kick it up a notch by having a pitcher of lemonade and some to-go cups when ready when you know the showing is going to happen. Just before you leave, place the lemonade on a table outside and put a note on the back door inviting them out for a cup! Be creative and create an emotional tie!

Point 2: Stage and Declutter
I cannot emphasize this enough. Even if you do a great job of making a beautiful connection outside, it can all be lost once the prospect walks through the door. That is why it is critical for vacant homes to be staged and for occupied homes to be decluttered.

Staging is about making a connection with potential buyers. They want to know that they can truly ‘live’ in the home. You don’t have to stage every room and you don’t have to set up a complete room of furnishings, however, making sure that you have some nice pieces of furniture, fresh flowers and colorful vases and lots of lamps and light are a must.

Decluttering is also important. The trick is to create a showroom appeal. You want a modern, clean feel and you don’t want to make the family feel like they are living in ‘your’ home. Some experts even suggest removing all pictures of family and replacing them with pictures of scenery, flowers and other serene settings.

Lastly, staging is not only about the look of the place. Staging can include sights, sounds and smells. Pleasant music on in certain rooms can evoke a since of calmness and fresh baked chocolate chip cookies never displeases. Again be creative and get potential buyers thinking about where the furniture goes instead of looking for problems with the home.

Point 3: Don’t Be Cheap
Remember, this is a buyer’s market and buyers know it! Don’t be cheap, offer right out of the gate that you are willing to pay closing costs. This may help you get an offer that is higher right from the start.

Also make sure that you don’t snub lower offers. Remember that people are trying to find a deal and these days they can. If they make an offer on your house then that means they are probably truly interested. Every offer deserves a counter offer; it’s basically a conversation starter that could lead to a sale!

Point 4: Warranties & Protections
Some creative strategies that could get your house sale moving and attract more quality buyers to the table are the exact right incentives for today’s market place! First, offer a home warranty, even an extended home warranty. This can be a great way to get people in the door.

But don’t stop there, some lenders and many real estate firms offer policies from affiliated insurers that protect the buyer in case of job loss. Offer to pay for insurance that will make payments for the buyer if they lose their job. Many times this can get a buyer over the hump and help them make an affirmative decision to buy!

In Conclusion; Be Creative

There are many other creative ways to get your home sold. Everything is on the table these days from Life Insurance that pays off the mortgage if someone should die to paying the first year of utility bills for a full price offer.

If you are a real estate investor attempting a quick-turn strategy you should employ all of these strategies to create a sale in a short period of time for top dollar. If you are a homeowner attempting to sell, these strategies should make your home stand heads and tales above the rest!

Remember that an emotional connection, imagination and strategies to overcome buyer’s fears and concerns is the way to a successful transaction in a shorter period of time. Good luck and happy selling!

For more information and to read the article that inspired this one go to http://www.marketwatch.com/story/story/print?guid=05010834-B368-4E28-A473-A3E147D3D657

The GM Affect

Interest rates have gone haywire the last couple of days. You won’t hear it reported in the media though. Why? Because it would look bad for certain economic positions and actions taken by the current Administration …at least that’s my take on it…

The problem is that the bond markets are upset about the way the Obama Administration has handled the bond holders for Chrysler and fear the same will happen with GM. At the administrations urging, the judge in the Chrysler bankruptcy case forced the bond holder to take on more risk.

Usually bond holders are the first to be protected in a bankruptcy but this time it was other interests that were protected first. (think Unions) The bond holders took a back seat to almost every other concern.

Before you go saying those ‘evil’ bond holders (lenders) deserve it, think about this. Bond holders invest in companies by making loans to them because they are risk adverse. Investing in normal stocks is to risky for these investors. There reason? They are investing money from pension funds and insurance companies. This money needs to be invested in areas with very little volatility and steady returns with low risk to the money. (think about your pension, you want safety right?)

The way these bond holders are being treated is a huge change from how large restructuring like this normally takes place. And this sets a dangerous precedent going forward. So with a bankruptcy from GM looming on the horizon, the bond market got very, very nervous and everyone backed out of the market in one day!

I’m calling this The GM Affect because it was so awful. We saw rates jump 1% in less than 24 hours ….by the way… That is completely unheard of!

Rates have come back down today, but I don’t know how long that will last. Rates jumped up to 5.5% from a low the previous day of 4.5%. Rates today are back down to 5% but no one knows for how long.

With a very scary economic report just out about a 5.7% decline in GDP the first quarter of this year and about companies slashing inventories and jobs (approximately 2,000,000 more jobs lost) I’m not sure how much longer rates can stay this low.

So while the Administration rolls our their latest campaign touting the ‘good’ that the stimulus package has done and while they roll out the parties for the supposed 150,000 jobs that were created, our economy has had the second largest contraction since 1981. (By-the-way, only about $11 million of the $45 Billion that has hit the economy was for worthwhile make- work projects. The rest was for one-time payments for welfare and Medicare and for the extension of unemployment benefits.)

I know that this sounds like political commentary and I apologize because it is truly not meant to be a political view point. I'm commenting on my concern about the numbers The numbers don’t lie, and since they don't lie, then someone or something else is lying. Could that something be the government, maybe both parties? Some will point back to the Bush administration as an excuse to support Obama’s actions. Guess what? Bush was wrong as well!

All the economic tricks and gimmicks being tried today have been attempted before. We did here in the late 70's to early 80's. and it didn't work. Heck countries all around the world have tried what we are doing and they will tell you it doesn’t work.

Call it Keynesian Theory, call it Social Democratization, call it whatever you want but understand this. If it is illegal for you to 'kite' checks to cover your debt, then why do we allow the government to do it? (Kiting a check is when you deposit a check from one of your own checking accounts into another and then from that account back into the original account in a never ending circle just to cover checks that you right elsewhere, at some point it will catch up to you.

So why are we allowing our government to do a thing that we would be put in jail for doing? Because of some ‘theory’? Does this make sense to anyone?

At some point we will not be able to print enough money to buy our own bonds to fund our bloated and bureaucratic government. I’m hoping for the best and preparing for the worst. Here’s a link to a great article with the bad news/good news that can help you make up you own mind. http://www.marketwatch.com/story/us-gdp-revised-to-57-decline-in-first-quarter

U.S Foreclosures Filings Sets New Record High

The second wave of foreclosures has arrived. Is the American economy ready?

The tide of potential foreclosures has been rising for quite some time. The U.S. economy had a brief respite while banks and lenders tried to decide which way the political winds were blowing. This may have briefly delayed many of the recent filings.

Now that the new administrations policies are clear, the cleansing of the banks balance sheets begins anew. Combined with holdover filings from last year, we are beginning to see the start of the ‘second’ wave of foreclosures.

This so-called second wave is caused by the Alt-A and Option ARM loans that are scheduled to adjust or come due between now and November of 2009. Many of the resets on these loans will cause real estate investors and laid off workers to default.

A recent article on MarketWatch.com (http://www.marketwatch.com/story/us-foreclosures-reach-record-rate-in-april ) suggests that the delay was caused by the moratorium on the industry that were recommended by regulators. Some believe that the recent stabilization in overall values across the nation may hold steady even though there is this new round of repossessions hitting the books.

Opportunity abounds for real estate investors with the means or the creative drive. With multiple options available, investors can still invest in real estate and with rising rents and low prices real estate investor activity in the market place appears to be increasing again.

While many thought that greed and over zealous real estate investors were partly to blame for the bubble in the economy, some economist have argued that prudent and professional real estate investors need to be active in the market in order to truly stabilize home values.

There are many lenders that have started to lend to investors again. Cautiously these lenders have entered the market and are lending to those that can prove experience and credit worthiness. Still other real estate investors are slowly testing the markets using creative strategies that skirt the traditional lenders and allow them to access capital that allow them to build and manage large portfolios of rental properties.

The time is ripe for real estate professionals. These are the times when fortunes in residential real estate are made and many people are seeking out the abundant opportunities in this market. Is the time right? Is America ready for the second wave? Only time will tell…