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Courthouse Step Foreclosures. Deal Or No Deal?

2009-04-28T11:20:00.004-04:00

Today I continued my research on the hunt for details on a possible upcoming influx of bank properties (due to a lift of the bank foreclosure moratorium) and to see if consumers are buying properties directly from the banks at the courthouse.

So, I went to the courthouse steps in Arlington Virginia to see today's scheduled auctions. First of all, all 3 homes set to be auctioned off were canceled. This happens frequently. The notice makes it to the newspaper, but the owner figures out a workout or a way to delay the process (sometimes multiple times).

I then asked the auctioneer whether consumers are buying them directly from the courthouse. While he said "they can," he also said they don't because the banks are buying them back at their loan amount, which is usually OVER the market price. He estimated that 95-99% of the homes sold are being sold back to the lender.

My theory is the banks don't have the resources to fully figure out what a property is worth. So they just buy it back from themselves at full price, and then they try and figure out later what it is worth. They do this by hiring a BPO (Broker Price Opinion, a non-official, cheap appraisal). (Sidenote: Lawyer question how this will effect the Deficiency Judgments, see the comments in the older post).

But this might change, so I will go back every year or so to make sure (I went there 2 years ago, and it was the same thing).

If you are reading this from your email subscription, make sure you watch the video on VA Courthouse Steps Foreclosures.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Bank Foreclosure Moratorium Lifted. Frank Calls CNBC & Jim Cramer.

2009-04-21T01:08:00.008-04:00

A couple of weeks ago Fannie Mae and Freddic Mac (backing most home loans) lifted a Bank Foreclosure Moratorium. I was concerned that the recent 80% drop in bank foreclosure inventory might be a temporary blip with an oncoming tsunami of bank foreclosures.

After hours of dead end research. I decided to call my buddy... Jim Cramer from CNBC's Mad Money. I thanked him for picking my birthday (June 3oth) for the bottom of the housing market, and I proceeded to ask my pal about the Virginia housing market and bank properties.

(EMail readers? Click to see the 2 videos.)

Do you agree with Jim?
Don't forget to subscribe to this blog (upper right corner of the blog) and share it with friends and facebook.
Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

p.s. While researching, I found a blog post by Virginia's Cindy Jones on the topic of Bank Moratoriums. Also check out this detailed post with a great chart.

Terms, the New Money for REO and Short Sales

2009-04-17T09:17:00.005-04:00

Ever heard somebody say "Cash vs loan? Money is money, the seller doesn't care, as long as we show up to close."

Sorry, but that was so 2000-2007.

With Banks, REOS and Short Sales, money is playing second or third fiddle to TERMS, TERMS, TERMS. Banks are taking 2-4% LOWER offers (when there are multiple offers) that are stacked with great terms including:

ALL CASH
No Home Inspections
No Finance contingency
No Appraisal contingency
No VA or FHA loans*
FAST closings
* Many will debate this and say that these loans have evolved and are as good as regular loans. Guess what? Banks don't care!

For example, I was talking to an agent the other day. Her client offered $100,000 over list with 50% down on a Virginia Bank Owned property. Another offer was for full list, ie $100,000 LOWER but with ALL CASH. The all cash won. But then the buyer persnickety (great word) started meddling with the bank addendum (see older post) . The bank said forget you. Went back to the 50% cash offer, which lowered the offer to $50,000 under full list.

Banks want LOW HASSLE DEALS!

For Virginia Short Sales, the seller doesn't care about the price (slight exaggeration). They aren't eating the loss. They want somebody that will standby and be patient. I even had one listing agent say "I don't care about the price, the bank will determine that with a counter, I care about staying power."

I am in no way saying that you should only buy with all cash (if you can great) and remove all contingencies. I'm just saying that it is very important to meticulously review all the terms in your contract and to make them as strong as you feel comfortable with. Maybe do a home inspection, but make it a "take it or leave it" inspection (not a "information purposes only," I hate those. They are sheep in wolves clothing.) instead of the default which essentially says "we will inspect it and then demand petty changes."

And believe it or not, I can't talk about all the things we do, but there are many other ways to win a contract for LESS than the highest offer. But yes, it takes some thinking (wow, an agent that thinks, imagine that?).

And generally I don't like escalation contracts.

Why? If you have great terms, you will be outbidding a sucky terms contract. How dumb would you feel if you escalated $10,000 higher because there was a high offer with a home sale contingency? Or if you waive the appraisal and the offer you beat doesn't. Why beat another offer the seller wouldn't have taken? You can adjust the addendum to try to protect from this. Make sure you are beating not only the price, but the terms.

Please subscribe to this blog and leave a comment, and feel free to leave your experience, even if you disagree.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Also I started a new blog that showcases each of my WheelEstateCam.com videos!

Boy Is It Hard to Find A Listing Agent/ Realtor in VA

2009-03-09T01:22:00.008-04:00

This is part 1 of a new series on picking a Realtor to list your home in Virginia. Make sure you subscribe to the blog.

Wow, do I feel for you! It is REALLY hard to find a good Listing Agent/Realtor... anywhere (not just Virginia).

How do I know? Because I'm going through it right now! I'm helping my brother pick a Realtor to sell his house in Texas (yep not doing FSBO since I want him to net more).

Overcoming his hesitations are EXACTLY like customers here. It is HARD to cut through the BS. Here are some typical questions he had and my answers. (He was amazed that I had a blog post for everything. Also I apologize for jumping around.)

1) I taught him to not fall for the oldest trick in the Realtor book... the Buying a Listing Trick (recommend a high price to win the listing, just to drop later, which nets the client even less). He got that, so he warned the agents he was talking to that he wanted real pricing and he would NOT pick based on the highest price.

2) When he mentioned staging, one Realtor's reply was "Sure we can do that, or we can list, wait two weeks and then stage it. That might save you some money."

What! Boy did this tick me off. Made me want to pull my hair out and look like I did before my hair drug medicine (see actual photo of me).

Any good marketer knows that you have one chance to make a great impression. You want all marketing efforts to peak at the same time (even down to the exact best day to list, which I think is Thursday). 80% of your visitors will see your vacant stale house? No way. "Run from that Realtor!"

But doesn't it sound so good? "to save you some money." Everyone wants to save money!! Even though that might "cost" you tens of thousands. Here is a video on staging costs (specifically granite) and calculating your return on investment (staging ROI)

3) Realtor and Stager in one? Some might be offended by this, and go ahead and call me a "Brainist." I don't think those with a degree in design can do staging full time AND be a full time Realtor. They are completely separate parts of the brain. (I messed up here, I initially had him talk to a combo stager/Realtor, but he got the sense that the combo'er, not to be confused with a comb-over, was not a numbers person. The combo'er said, "my Realtor friend Sally thinks we should price it at XYZ." That isn't what a seller wants to hear.)

Also it is hard to find a good stager/redesigner. Some even lie! And you know I'll call them out on it. See: Stager Caught Lying About "17 day avg" Results!

4) Find a great stager 1st and you will find a great Realtor. (kinda sounds epic?)
(shameless plug... earmuffs... If you are looking for a listing agent in Northern Virginia, MD, DC, then you can skip this step since you already found us... end shameless plug.)
Whenever I jump into an abyss (non DC area) to help a college friend, or a relative find a Realtor... I first find a great stager (I use ActiveRain). I ask the stager "Who uses you frequently and always uses super wide angle photos?" Man of man this eliminates 97-99% of the Realtors and leaves me with some great options. I'm sorry, while it won't guarantee anything, if I find a Realtor that requires all of their listings be staged, I am 99% confident they will not be a Sucky Listing Agent. Ask Dave and Bill, they were thrill when their houses sold in a down market for over what they were expecting.

5) Another Realtor wanted to hurry and list the property in 48 hours.
I told my bro, no fear... I have a blog post for that too. THROW-UP listings. Do it "RIGHT," Not "RIGHT NOW!" I consider this to be a trick. Some Realtors go to some brain-washing Realtor training programs (you know who you are) and they push: #1 GET THE LISTING SIGNED. And "How many listings did you sign up this week, did you make quota." They don't really care about getting their client top dollar. They just wanna crank through a mass quantity of deals. Fast, Fast Fast. Sorry, it takes time to do it right, and doing it right, nets the seller MORE!

6) Another hesitation from my brother: "But I want the Realtor that sells everything in the neighborhood." While there can be some benefits, I know some VERY sucky agents that do a crapload of business.
Here is their secret... They spend $100,000 (yes 5 zeros) sending out postcards endlessly. The postcards look like they are trying to sell somebody's home. But the inside scoop (which you only get on this blog, so make sure to sign up) is they are NOT marketing the home at all (postcards don't sell homes, especially "sold cards"). They are MARKETING THEMSELVES NOT THE PROPERTY!
They spend a boat load of $ to get you to call them. That in NO WAY correlates with them being any good at getting you the highest net.
Why don't I get into that business? If the $100k pays for itself, why not? Because it disgusts me. I'll just blog and save a forest. I love flipping through those 4-color magazines in grocery stores. With full page ads "selling" homes. That does NOT sell homes, that sells the Realtor and lets them say "look I will put you in this glossy magazine" that no buyers look at. They instead use the interweb.

Other BS.
7) Don't fall for the guy that uses in his pitch "Google XYZ area and look, I'm #1." Like above, that just means they know how to do Search Engine Optimization by hiring a firm in India to write mini articles to get their ranking up. Search engines do NOT sell your home, but it might get you to contact that Realtor. Sure sounds powerful doesn't it? If he can market himself, he can market my home. Yes logical. But no, it is not correlated.

8) I got this from a blog reader today, "Jake" thought I'd like to highlight the BS. This came from a Realtor he was getting a newsletter from (he betrayed me I guess):

As part of that Realtors' (NOT MINE) "10 questions to ask a Listing agent"
"How many Buyers are you working with currently? Everybody knows the more buyers your listing agent is working with, the better your chances of selling your property quickly. It will also
affect price because a listing agent with many buyers can establish an auction-like atmosphere where many buyers all bid on your home at the same time."

Are you kidding me? See pulling out hair photo above. This is such BS. And if it isn't, make sure you are not hiring that agent as a buyer agent, because she just admitted she is going to screw you if you buy her listing. (Meanwhile I tell buyers NOT to buy my listings)

9) Not all Real Estate bloggers are good Realtors. (and vice versa). Ha, this is worthy of another full post.

I had a prospective buyer (from my blog) call me and say he was hesitant because he used a New York Realtor that was a well-read blogger, but they ultimately didn't think he was any good.

On the flip side, I had a buyer that wanted a recommendation for a Realtor in another town. I gave her a great Realtor's name. But the seller didn't want to use that Realtor... because she didn't have a blog. Too funny. I have been bugging her to start one, but she says she isn't a witty writer. Also she gets tons of referral from satisfied prior clients and is happy with her deal flow. Kudos to her!

Morale: not all Realtor bloggers suck, and not all non-blogger Realtors don't suck. (got that?)

So the bottom line is I feel for you. It is tough. So much trash to weed through. All I can say is if you read this far into the blog post, you are doing your homework and I commend you. Class 2 is for you to read the rest of my Listing Agent Advice posts. ;-)

Wish me luck with my brother, and a blogger loves his commenters, even if you say "hi, thanks."
Sign up for more progress reports on my brother's listing.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Please report typos.
Brain photo by Gaetan Lee

Auctions & Bankruptcy & Bring All Offers in Great Falls Virginia

2009-03-01T16:36:00.005-05:00

I went to an Open House today for a $3Million+ "Auction" in Great Falls Virginia today. What a spectacle.

Funny how buyers think they are the only ones buying. As I pulled up, I was rerouted to the next street down to take the "shuttle!" About 20 Mercedes Benz, Lexus, and BMWs lining the road.

At the right price there are always buyers looking for "bargains." In this post I want to unravel the new techniques in trying to move (sell) mansions and estates in Great Falls Virginia. It also relates to other areas as well.

System #1: Auction
Auctions are sexy. Make sure to get a bunch of people in a room and get each other excited. Even the Open House was only 1 hour, so it looks 4x more packed then a normal 4 hour Open House. But it was packed and my buyers were amazed.

This auction was requiring bidders to bring a $150,000 cashier's check before you could bid. The "starting bid" was $1.5M. But that means nothing. That is 100% marketing. Why? Because there is an unpublished "reserve." So even if only 1 person bids at $1.5M, they still won't sell it to you (most likely). So why not start at $178.72? Because $1.5M lets you think for a second that you might get it for that! And they use you to bid up the next guy.

And on TOP of that... this auction has a "10% Buyer's Premium." Oh and did I mention is it also a Short Sale to boot? Bid up all you want, the bank will likely still make a counter.

I have to give it to this Auction company though. They WERE able to sell one home this way. And that says a lot. If this company had never sold one, I would likely 100% write it off. For the one that DID sell, it sold for $500k under tax assessment. It probably also started at $1.5M, but sold for $2.5M. No 1/2 price firesale here.

System #2: BANKRUPTCY.
The seller is in "bankruptcy" so all offers are encouraged (see below). It is not clear to me who actually is selling the property. Does the builder have the right to agree to a price, or does the bank have a say? Does the bank have the only say? Or is it a court?

People ask me "what will it sell for?" Heck I have no idea. This is all unchartered waters. All I can do is look up past data to see if I can predict the future. So I did a Realtor MLS historic search for 10 years for the word "Bankruptcy" from $1m to $4m.

Only 1 had sold in Northern Virginia.
Listed for $1.05m, sold for 1.1m (over list)

And two others "withdrew."
One of those was listed at $1M and came back onto the MLS a year later as a bank owned and sold for $750,000.

System #3: Bank REO
These are regular bank owned properties for sale. They have already undergone the other tricks and marketing techniques and they are serious about selling. Since 2007, in all of Fairfax I found 13 over $1m . Link to Fairfax Bank Owned and Sold via the MLS
Most of them sold AT list and a few within 10%. How can that be? Well if they are priced right, below "market," they will sell fast.

These are the best options. I recommend signing up for email alerts via FranklyMLS for the phrase: Cityname Bank like this: Great Falls Bank (note that this site searches the remarks, so if it says "near Suntrust Bank" it will come up in the results).

System #4: "Bring All Offers"
What does that really mean? Does that mean a $4M place will take a $1M offer? Not likely. Or at least I wouldn't tell you about it, since I'd call my mafia friends and find a way to buy it myself (joke). So again, I look at data. What homes that have used the phrase "Bring All Offers" have sold in Great Falls or Fairfax over $1 million in the last few years...? In all of Fairfax since 2007, only 8 have sold.

Lowest List Closed Price
$1,080,000 $1,058,000
$1,098,000 $1,000,000
$1,149,000 $1,120,000
$1,201,500 $1,185,000
$1,209,900 $1,000,000
$1,299,998 $1,175,000
$1,395,000 $1,230,000
$1,890,000 $1,750,000

I don't see any huge firesales. I do see two that were 20% off though. So you know an offer 20% below shouldn't be laughed at. See all 8 "Bring All Offers" Homes Sold

More interesting facts:
How many homes have sold in Fairfax since 2008+ for over $2M? 109 homes sold.
Only 24 were in Great Falls, most were in McLean.

Only 7 have sold in all of Fairfax (including Great Falls and McLean) from Jan 1 2009 to March 1st 2009. Oh yeah one said "Motivated seller" in all caps. Listed at $2.2M sold for $1.9M.

If you are looking in this price range let me know, I can pull some more specific data for you. Whatever you do, don't just call the listing agent. Having a buyer agent can help you save a ton in the end, if they are good with data analysis.

Soon I want to blog next about creative financing for these higher price estates. Why? Who wants to sell off their stock at a 50% loss to buy a home for a "deal?" (see Luxury Homes blog post) Including full seller financing, or a mix of a bank loan and partial seller financing, also called Seller held trust (either with interest or a balloon payment in 5 years).

Don't forget to sign up spam-free for this blog in the upper right corner of Blog.FranklyRealty.com

Thanks for reading! Make sure you add your comments and questions. Nobody likes a dead blog.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Alert: Short Sales ARE CLOSING! But New Tricks!

2009-02-12T01:28:00.009-05:00

NEWSFLASH! MANY Short Sales are NOW CLOSING! But still BEWARE!

They are the best deal in town, by far. More so than bank deals. But if you don't read this carefully you will be FORKED!

In case you are new to the world of home shopping, there is something called a Short Sale. You need to read the details on my post: Short Sales Are "Fake Listings." Only 5% Close!

But the 1 liner explanation is this: A distressed seller facing foreclosure tries to get the bank eat the losses and allow a "short sale" thereby selling the home for 10-20% below market and the bank eats the $50k to $250k loss instead of the bank losing even more money in foreclosure.

The problem was that only 1 in 20 were closing. Read the post above to learn why, but it had to do with clueless listing agents (many still exist) and banks having 1 processor for 600 homes.

Quick Tip:
REOS/ Bank Owned MLS Listings are 7-12% below market
Short Sales MLS Listings are 12-20% below market.
Do you get why this is important? See Wheel Estate Cam Video

1 YEAR AGO
Everyone wanted a Short Sale. They seemed too good to be true... well they were. Then came horror stories of people waiting 4 months and then the bank saying "sorry we changed our mind" and leaving people homeless (they already sold their home!).

6-9 MONTHS AGO
Nobody wanted Short Sales. The pendulum swung too far in the other direction. "Hell no, I'm staying clear of Short Sales, they are fake!"

NOW?
Be Smart. Weed out & Pounce on the Good.

Well the time has come to putting our thinking caps back on. You have to learn how to spot a "bad" short sale and how to know if a short sale is "real."

Bad short sales still have a 1 in 10 chance of closing (up from 1 in 20).
But a "Good" short sale can have a 80% chance of closing!!!

NUMBERS OF SHORT SALES CLOSING
In my post over a year ago only 3 short sales had closed in all of Arlington in a year out of many dozens of failures. In the last 4 months 3-4 have closed in my building alone (Clarendon 1021)!

Inventory levels
Short sale inventory can vary greatly by each area. Sometimes the "hotter" areas will be so infrequent that a Short Sale might not be an option (keep reading to learn about offers on Under contract Short sales!!! shhhh). Also if you have a good agent (insert plug here for me), for condos, consider asking management about upcoming delinquent condo units.

NEW TRENDS FOR SELLERS/ Listing Agents

1) Undisclosed Short Sales
SS got such a bad wrap that agents stopped putting "Short Sale" in the public remarks. Some even removed them from the Realtor-only remarks. How is that allowed? Something about privacy, and the rights of the seller. And who cares about the buyer anyhow, right?

If it has a crazy low price, like 30-50% off assessment ... and it is NOT a bank owned property, it is likely a short sale. (only FranklyMLS.com lets you sort by tax
assessment as a ratio of list price, try it, it is the #1 best tool for bargain hunters, see video)

Sidenote: Undisclosed Bank Properties. This really blows my mind. More and more I am seeing REO and bank owned properties (after foreclosure) that do NOT say "bank" anywhere in the public remarks. Maybe people are getting scared of bank properties too? See video of me skiing a black diamond while talking about banks.

2) "Approved Short Sales"
These can be pretty good. This oftentimes is an experienced agent that has already done the 1-3 month processing and has an "ok" from a bank and a set price. You can sign up for alerts on FranklyMLS for the phrase Approved Short Sale Virginia these can be good, but they go FAST. Note that 50% are under contract.

3) 3rd Party Short Sale Negotiators for sellers

This is a brilliant idea. Non-Realtors that are hired to negotiate short sales for the listing agent. I spoke with one company today. Their team comes from former bank loss mitigators. So they know all the ins and outs. They closed 60 last month! They know exactly what each bank needs, to the "T". Sure they cost about 1%, but who cares? If they can double your chances for closing a place, and for 20% under market AND make sure the seller doesn't get stuck with a note of deficiency judgment... well worth it.

OLD TRICKS/TRENDS BY Listing Agents
1) Way Underpriced/Fake Short Sales. Recently one of my buyers found a $2.5M home that was listed for $700,000. Real or fake?

2) Clueless Agents. I am a 3 year member of the NVAR education committee. We are trying our best to get more free education out there for Realtors to list these properties.

NEW TRICKS FOR BUYERS
1) Offer on "Under Contract" short sales.
This is interesting. Do not skip this, you will be quized.

There is a huge Realtor debate on what it mean to be "Under Contract" with a short sale. Even though I got an "A" in my Contracts class in law school last semester, I am not a lawyer, and I am not giving you legal advice.

MRIS (the local MLS provider) has rules that you must put a listing as "Under Contract" when the seller signs the offer from the buyer (and then most people ignore the listing, but not us! & readers of Blog.FranklyRealty.com (make sure you subscribe, do it now, I'll wait) ).

However some listing agents would prefer to keep it as active so they can get more offers. Obviously this ticks off the buyers.

On my previous short sale post I covered advice directly from the legal department at VAR. It talks about signing it "contingent upon 3rd party approval" versus "Acceptance upon 3rd party approval." A night and day difference. One is under contract, one is not.

But regardless, the seller would sign anything. They would sign an offer for $100. They don't care. They are having the bank eat $100,000+.

So my point is, something might be "Under Contract" for a long time, but if the bank doesn't sign it, it means nothing. So why not offer on homes that have already sat for 30 days and are about to be considered by the bank (takes the bank at least 30 days to hire an appraiser/BPO, review the paperwork.)

Example:
Sold Market Price Home A: $500,000 (recently sold unit)
Short Sale Home B: $400,000 which is "Under Contract"
Active Regular Home B: $490,000

Offer $410,000 or $420,000 (note it takes hours for us to come to a real price based on FranklyCRA, and tons of other data, but play along here) for the place a month after it goes under contract.

Technically it would be a "bank up offer" but the bank would see both offers (in some/many cases) and reject the initial offer (which is signed by the seller) and take the 2nd offer that is $10-20k higher thus saving you $70k vs the next "regular" listing.

I go more into this over on my Realtor to Realtor Active Rain post where short sellers debate the concept. Anybody Offering on "Under Contract" Short Sales?

2) Short Sale Negotiators FOR BUYERS!

Make sure you read above about how these new companies help listing agents. But I think they should help buyers. I plan to use them, I will let you know how it goes. The next offer I put in, I will require in the offer that WE pay* for this 3rd party company to take over the negotiations. Sure we'll stick around if professionals are running the show. They can get the deal done in 50% less time, and twice the closure rate. When I say "We" I refer to adding the 1% to the seller's closing costs. This step could really turn around how short sales are viewed.

3) FINDING GOOD SHORT SALES
a) Spot them using the Short Sale Scrubber (tm). Only on FranklyMLS.com, when you search, if you see a * next to the price, that means the words "Short Sale" (or 3rd party approval, and it removes the * when it says "Not a short...")

b) Look for a HIGH # of Photos. While not conclusive, a listing with over 5 photos is 4 times MORE likely to go to closing vs a 1 photo listing. Lazy agent tends to lead to failed short sales (not always).

c) Look for Listing Agents with Prior closed short sales. Have your Buyer Agent run a FranklyCRA and see if they have closed a short sale before. IF they have, your chances skyrocket.

d) Top 10 questions to ask a Short Sale.
This was featured in the Washington Post. Ask these questions before getting serious. If the agent can't answer them, walk. Today I got a "It is none of your buyer's business if my seller client is still paying the mortgage." Oh, yeah, my client waiting 6 months because the bank keeps cashing the checks and has no reason to eat $200,000? Yeah right. We have the right to know, or we walk.

e) Short Sale Alerts on FranklyMLS.com
You can set up alerts for phrases like Short Sale Arlington. Our site updates every 90 minutes. Make sure your Realtor is high tech and can do all the contracts digitally (like I always say, dont be silly and try and use the listing agent, subscribe to my blog and soon you will learn why). Consider even offering at or above list sight unseen (that would take another full post to explain pros and cons).

f) Wiki, Wiki, Wiki. 61,000 Additional photos. Found NOWHERE ELSE!
Don't forget, FranklyMLS.com is the first and only site in the USA that encourages buyer agents to add photos (see video howto) to photoless Short Sales.
ATTN READERS: Why don't you help out too? You, or your agent, should be contributing photos.
Look at Jeff Royce's contributions to photoless short sales. Every other site has 1 photo for 14 of these 17 homes. Because of Jeff, we have 300+!

Every other MLS site= 14 homes 14 photos (1 each)
FranklyMLS.com WIKI= 14 homes 350 photos.

Hours saved and money on gas to see a 1 photo short sale= Priceless!
Thanks Jeff from OurFairfax.com for being the #1 Contributor on FranklyMLS.com!

Sidenote for Agents: Ask me about getting a Free Branded IDX. Yep, FranklyMLS.com with your name on each page and email alerts.

FUTURE BUYER TRICKS: (sign up for the new features blog for FranklyMLS.com)

1) What do you think of a feature that would put a GREEN * next to a Short Sales listing if it is being performed by an agent that has previously closed a short sale? I think that would be killer, anybody else? (please add comments)

2) Hyper targeted email alerts for homes in an area by "great short sale agents" that have closed 2+ short sales in a year. These people know what they are doing, and you can get a steal. Currently this is not automated, so email me directly to sign up for your area.

3) What do you think about a feature that lets you "favorite" a short sale listing, and if it goes off the market, but comes back as a REO, you get an email alert? Also working on alerts for closed price. Anybody want to get an alert the day your Favorited home sells with the price, including subsidy?

The End.

So, sorry for the long post. It was 3 months coming. I feel relieved. Now I can point people to this post instead of spending an hour on a 1/4th as in depth email.

Don't forget to subscribe to this blog in the upper right corner of Blog.FranklyRealty.com and forward this to anybody considering buying short sales. Note every area of the country is DRASTICALLY different.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Please report types.

Pendulum photo by Brandi666
Fork image by KevinDooley
Random Chair on Head by jawcey
Cat Pounce by Yogi
Back up truck by Wellohorld

MLS Data, Uncovering Gems & Meet Jeff Royce

2009-01-29T23:43:00.005-05:00

After 82 blog posts, I have never re-posted or written a post about another blogger's post.

However, today (actually earlier this month, but I never completed the post) I saw a post that I know took 4 hours to write, and is very informative. Also it gives me a chance to introduce Realtor Jeff Royce. He has one of the best blogs around for Fairfax Homes (that was for Google Juice), and after 11 years in the business he just came over to FranklyRealty.com from Re/Max. Welcome Jeff.He also got a Trulia "Best Answer" of the week award (out of hundreds of Realtors), so he knows his stuff.

Anyhow, back to his post, he talks about finding homes near 1 mile from the Metro.

On FranklyMLS.com we allow you to search the public Realtor remarks (one of the only sites that let you do this). Here is an example: Arlington Metro. However Jeff makes a point that data is only as good as the Realtor that puts it in.

He found that for around Pentagon City Metro, only 65% of homes within a mile of the metro, also put the word "Metro" in the remarks.

There is also another way a Realtor can enter in Metro data. They can click the "Within 1 Mile of Metro" when they are entering in their listing. However only 45% of agents do that (shame, shame). And yes, some will JUST check the box and not put it in remarks.

So now (due to Jeff's suggestion) FranklyMLS.com now will search BOTH the public Realtor remarks AND the Realtor checkbox when you search for the word Metro. But it still isn't perfect. Some agents leave off both. In that case only a map search can find homes within a mile. FranklyMLS.com doesn't do that (the focus is to have a super fast data driven site), but maybe it will at some point.

ASK YOUR REALTOR FOR MULTI-MAP ALERTS

Jeff gives examples of the back end Realtor MLS access "Matrix" database that lets him create circles, multiple polygraphs etc. To the right are 10 areas in one search. Can you see the smile?

BUY POORLY MARKETED HOMES!
(vs well marketed homes, see Don't Buy Our Listings)

1) Buy homes with no photos. See Photoless Listings, save $15,000 (just yesterday I was making fun of my friend Brian for a no-photo home that I sent him a link to. He said "F-that." To which I sent him the above link.

2) Don't be too specific when searching.
Many bank owned listings and short sales will forget to check boxes like "garage" so if you search only for homes with garages... you might miss the best stuff.

Here is a little video on the topic. The WheelEstateCam.com went on location again. (Reading via RSS/email? Click here)

I know I have said this a dozen times, but make sure to subscribe to future posts. I have a great one about Short Sales in Virginia. They are...

Also I created a new FranklyMLS.com new features blog so you can learn about each little tweak (like Minimum price, faster cell mode for full listings, Request Wiki Photos, Tag A Hood and LIVE Realtor Chat!).

Written By Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com

Too Busy For You? Nah.

2009-01-16T11:53:00.002-05:00

I got the best feedback of the year yesterday. Somebody said they wanted to use me as their agent, but they thought I was too busy for them. They signed up another agent and they were disappointed.

Then they recommended my blog, Youtube and FranklyMLS.com to 3 friends. They also liked what they read and saw. But each one also thought I was too busy.

So to dispel this, I made a video (I didn't have time to write it out*). (click here if you don't see video)

Written by Frank Borges LL0SA
Broker FranklyRealty.com

* That was a joke.

Redfin Increases Fees 50%. "Advantage" Leaves Off Seller Subsidy. Oops.

2009-01-06T08:03:00.016-05:00

So I'm a big fan of Redfin. I love their MLS search engine (better mapping vs. my faster FranklyMLS.com) and don't worry, they love a good debate, as long as they get link love (helps with Google).

This is a 2 part story. 1) Redfin Increases rates and 2) Fuzzy Math on Redfin's "Advantage" calculation.

Part 1:
Many people might not know, Redfin two months ago increased their buyer agent commissions by 50% (now receiving 1.5% vs previously 1%).

I congratulate them. I have frequently said "I used to rebate, but then I got good." (see Realtor Rebates also see Redfin Saves $27,000 vs FranklyRealty.com Client Saves $152,000! )

So I thought their 50% increase would be an interesting message to get out (few people know this, they just remember the headlines). But I also re-stumbled upon their "Real Estate Science" blog post claiming that they ALSO did better negotiating vs an average Realtor.

That is a pretty ballsy claim.

I see why they felt they had to unleash "data" since their jealous competition was trying to dismiss them by saying: What you gain in rebate, you lose in negotiations.

So their data proving they are better negotiators is great marketing, but it is just that, marketing. There is no scientific correlation to better negotiations (in my opinion).
A larger % off list is not better negotiation.

For example: I've often said, "I'd rather a buyer pay $12,000 over list on a property that is $50,000 underpriced, then negotiate $50,000 off on a home that is $100,000 overpriced." See video on bank bidding wars. And recently I helped a client win an over list bidding war (6 buyers) and we were NOT the highest price. According to Redfin's stats I didn't do as good as an agent that got below list (regardless if that listing is overpriced).

Did you know that over 50% of Prince William listings sell for OVER list price? (based on 35 recent sales, not counting subsidy, which makes the stats look more impressive.)

Anyhow, my other gripe with their "scientific" analysis is what I think is a pretty HUGE flaw in that data. (see why I don't like certain data but love other data, see best post ever FranklyCRA.com)

A.D.H.D. Sidenote: Also they don't allow lowball offers. While I could use this as an opportunity to say "use us, we will submit your lowball" that would be a bait and switch, since I actually don't believe lowballs work (see video on lowballing).

Why do I feel compelled to write this? Am I threatened? Nope, I just get asked a lot about them (like to match them, which I personally won't), and this 3 hours to write post will save me the 34 minutes explaining why. I just send the link. I guess that is shellfish, but it lets me focus my time on saving clients a lower NET, and yes it takes actual human hours to do this.

So what is wrong with their claim that they negotiate better (besides % off list not being a good indicator)?

They left off something pretty big in their stats...

- SELLER SUBSIDY -

Seller Subsidy is also called Seller Paid Closing Costs, or Seller Contribution, where the seller will pay part of the closing costs (bottom line, the seller cares about their NET, but I highly recommend to MAXIMIZE this number as it makes your home close HIGHER, long story for a future post, make sure to subscribe to this blog).

Anyhow, Seller Subsidy has skyrocketed in this market vs the 2005 boomtime. And lenders have STRICT requirements for how much "cash back" (regardless if that is from the seller or the agent) will be allowed on the HUD1*. (*Update 1/8/09: Redfin does somehow give rebates OFF the HUD1, they found a legal way to do this)

The result? A rebater, like Redfin, has to adjust their offer accordingly.

Example:
A) $510,000 Published Close Price with a 2% Seller subsidy= $500,000 NET to seller
vs
B) $505,000 Published Close Price with a 1% Seller subsidy= $500,000 NET to seller

Same NET to Seller!

The "Close Price" looks 1% lower in Home B vs Home A.

So the major flaw in their data is Redfin is using the "Published Close Price" (Home B) NOT the NET closed price.

I brought this to Redfin's attention, and they told me that the areas that they calculated do not publish the seller subsidy on the MLS. How convenient. (note that Lane Bailey questioned this on Redfin's blog months ago, with no reply, and minutes ago I found his post on it and more Redfin exposes).

(Update 1/7/09: Redfin maintains that the subsidy data is not available in the area where the study was made. Ok fine, but I maintain that a rebater should know that subsidies are lower, and thus disclosed to the public that their data could be off significantly.)

However in Northern Virginia, our MLS DOES publish this data (No Va is NOT in their science analysis since it is "too new"). When I ran my ROUGH unscientific stats, it showed that Redfin was .75% WORSE, almost a full 1% WORSE in the seller subsidy department. Again this is because the lender HUD1 closing docs will not allow total cash back (subsidy or rebates) to be too high (Update 1/9/09: see workaround above). My #s were based on 65 Redfin purchase closings in VA, vs 100 closings on Dec 29th 2008, which I do NOT consider 100% scientific, mere food for thought. (Update 1/9/09 I also ran 100 homes on April 4 2009 and jan 4th and got 1.4% and 1.6%)

(I'd love to know how they do on Home Inspections re-negotiations. This can sometimes take TWICE the time of the initial deal.)

The Net is so important, that on FranklyMLS.com I barely show the Previous Close Price on listings (yeah we are the only MLS site in the DC area that has this data), FranklyMLS.com instead emphasizes the NET closed price after subsidy.

So a super sharp consumer will say "AHA"!
And try to catch me with "You used the phrase 'Same NET to Seller', what about the Rebate? I care about the Net to the BUYER, ie my bottom line 'savings'. You can't fool me Frank!!!"

If you didn't catch that, don't worry. This stuff is tricky (I Pitty Da' Fool) , and numbers can be easily warped and manipulated. (When anybody tells me their "team" is #1 at this office or that, I like to say that I was the "#1 Realtor in the USA, 30 and Under, in sales volume... in my First Year in the business" a true statement, ask me for details though.).

So back to Net to Seller, that is the point of my Realtor Rebates blog post, and for discount listings and For Sale By Owners go to my 2nd best post ever: Go FSBO! Save $20,000! Agen t Tells All!

In their science blog post (which is kinda confusing) they claim "on average 1.015% below homes’ asking price, while customers of other brokerages paid .087% below asking price."

Well with my previous post on % of list data . I showed the average agent getting about 1.5% off (talking closing price, NOT NET).

(update 1/8/09, the below is not scientific, it uses some of Redfin's Seattle numbers and intertwines my ROUGH Va numbers. This is not a "scientific" comparison, but food for thought)

So if Redfin
a) Gets their clients 1% off on negotiations (their scientific data in Seattle)
b) Only .75% subsidy (My rough Va numbers)
c) 1.5% off with a rebate (was 2%)
Redfin Total = 3.25% Total off

Average Agent in Virginia
A) Gets 1.5% off (my rough Va data)
B) 1.5% average subsidy
Avg Agent Total = 3% Total off

(rough) RESULT? Advantage Redfin= 0.25% vs an Average Realtor. (do you see where I am going?)

Again, this is not a bashfest. I have recommended people for Redfin (mainly their great search engine), and they have very sharp Realtors that I have met personally. I Like Redfin. They are GREAT for the business and for my business.

If you have no alternative, sure why not beat the average by 0.25% (heck I do that with how I buy stocks via index funds)

Shameless plug coming on. Turn away! Hurry! EARMUFFS!!

If you are looking for average service, Redfin is better.

We don't offer Average service, here Excellence Comes Standard (tm).

Written by Frank Borges LLosa- Broker FranklyRealty.com

Encore? Ok, here you go.

Two bonus stories on Discounters.

Update: my first story is under review. Long story, will explain later

Example 2) Another client had a horrible experience with an average Realtor (or maybe below average), so in the future they vowed to use a big rebator. Until they read my blog. Actually ALL of my blog (ask if you want me to send you the blog in book form). They read EACH post, even saying to me "I see you didn't buy a Saab" which was in reference to the car buying post. They signed an Exclusive buyer agreement, see Exclusive Buyer Agency Contracts. Don't Sign Them... Yet.

We played hardball on one house. So hard we didn't win it. So we Round Robined ("Round Robin" Buying System. Unearthing The Desperate Seller.)

over to another house. We were so aggressive and impersonal (long story on my stategy, heck I can't put it ALL online, or the other agent will read it) that the seller felt the buyer didn't want it as a "home." Apparently I wasn't warm and fuzzy, and this deal needed that. So, having never dealt with a no counter like this, I got creative. We wrote a warm and fuzzy letter. Including a photo of the buyers and about how much they loved the fountain in the back... stuff like that.

They accepted the offer. No counter. About $10,000 to $15,000 below what my clients were willing to counter and about $50k below list. Few Realtors will take all that extra effort to fight for that last $15k. We do that.

The End. Please report typos.

Disclaimer: I might come off kinda cocky here. Sorry about that. I just love what I do and I get all worked up. I promise to be calm in real life, like a real person. Also make sure you subscribe to this blog (at the top of the blog).

And don't forget my more frequent Video Blog http://youtube.FranklyRealty.com

FranklyMLS.com at 5Million. Now: Streetview, 4x faster, More data

2008-11-19T01:21:00.014-05:00

After 5,000,000 page views served and 40,000 Wiki added photos, FranklyMLS.com (Frankly MLS) has done it again.
A new round of 1sts for MLS Search engine features! And you might have been wondering what I was up to.

PREVIOUS LIST OF FIRSTS:

First with Keyword search of remarks, subdivisions, zips, city, schools, agent name etc. (like Arlington bank owned)
First Wiki site. Over 1300 buyer agent reviews and photo albums. (details)
First with 4x larger mls photos. (example)
First to Scrub remarks for Short Sales adding a * (blog post)
First to Scrub remarks for Open Houses (since 50% of agents enter them wrong)
First with a cell phone mode (see video how-to, or see cell mode)
First to sort by Tax Assessment as % of List price. Bargains!
First to show both Days on The Market DOMM & relisted DOMP (what's that?)
First with spreadsheet searching. (more data on 1 page)
First with password free email alerts.

Video showing the latest features:

Link to video

New round of FIRSTS:

First to incorporate both Google Streetview & MS Virtual Earth Aerialview on one page. Photoless listings come alive (see ex: 1, 2, 3)
First with Price history & Previously listed price history! (ex: 1, 2, 3) (so far not on all homes)
First with Open House history. See how often they have opens.
Now 80% faster! Fastest site out there.

Other new features:

New design. You voted for it, apprentice style.
Export the data to Excel
New Search syntax. Now you can search by

Negatives. Remove words or areas you don't want. Like: McLean -22102
Bedrooms. Want only 2 bedrooms? Use 2bdr or you can remove 1 bedrooms with -1bdr
Home Type. Add to your search: detached, condo, townhouse
Phrases. Search for "bring all offers"
Partial words. Use the *. Like: PW* for all MLS #s that start with PW. or: Water* for Waterfront and Waterview.
Actives only? Add the word Active. Like Arlington Condo Active

So hope you enjoy the changes, hope you will offer some feedback. Coming up next... MLS sold data!

Agent Update: Ask about the Free-IDX for your blogs and free-branding. Also it is now easier to become a top contributor on the WIki MLSs. Just review about 10 homes and get free visitors to your site.

Written by Frank Borges LL0SA
Broker FranklyRealty.com
Owner FranklyMLS.com
twitter= franklyrealty

ps. Funny story, so my favorite post is my Frankly CRA post, so I decided to get the domain name www.franklycra.com , only to realize that it spells Frank Lycra. So don't think it is a site with me wearing Lycra!

pss. If you have a friend looking to buy, have them try out FranklyMLS.com and for keyword sake: Frankly mls .

Stocks Tank, Luxury Homes Volume Down 50%- Week Over Week

2008-10-10T15:18:00.010-04:00

So the stock market is crashing to the worst week ever (I think due to off books Enron style account, see 07 warning).

So how will that affect the housing market for luxury homes? Don't care? Then don't read this.

I had a theory- albeit obvious - that those buying luxury homes over $1 Million in Arlington and the DC area would come to a halt since these buyers most likely "had" their money in stocks.

Who is going to unload their stocks down 25-45% to buy a house? With a 20-25% down payment (5%-10% down is much harder, if not impossible, now) that can make that $2 million property feel like $2.2M overnight, and without another wing on the home.

My data-pull results (not regurgitated data):
I pulled up homes in the DC area from $1 Million to $4 Million that went under contract (more reliable than solds) for a 4 day period and compared it to the one and two weeks before.

9/21/2008-9/24/2008 26 under contract
9/28/2008-10/1/2008 25 under contract
10/5/2008-10/8/2008 13 under contract

For homes from $800,000 to $1,000,000:

9/21/2008-9/24/2008 24 under contract
9/28/2008-10/1/2008 25 under contract
10/5/2008-10/8/2008 12 under contract

That doesn't look good, to say the least.
Will this become a longer term trend in the higher end luxury market? Dunno.

What if you are high end buyer?
Know the stats, know that 50% of your competition just flew the coop. This allows you to be more aggressive. As for waiting, that is obviously your call, I don't believe in market timing.
Heck it could get MUCH worse, or things might stabilize and the buyers might come back.

What if you are a high end seller?
Read above, but know that it isn't your agent slacking off. Also if you do get an offer... man, you have to have some serious cohones to try and get much better. Sure next week might look better, but you really never know.

If you have any specific questions about a marketplace or price bracket, let me know and I can run some specific numbers.

If you know somebody looking at high end homes, forward them this email and make sure they subscribe to Blog.FranklyRealty.com .

-Written by Frank Borges LL0SA Broker FranklyRealty.com

Image is a photo of a $3.34 M property sold previously by FranklyRealty.com
Please report typoes

My 07 Prediction & Where I've Been... Youtube & Wedding & Law School

2008-09-21T23:55:00.005-04:00

First my thoughts on the $700,000,000,000 bail out... I told you so!

Read my blog post from 12-2007 entitled: SIV= Imagine Enron, Bank Wide. (I posted it on my more frequent, but less polished blog on ActiveRain)

The #1 problem is OFF-BOOKS accounting! All of these sub-prime loans are hidden. Nobody knows how much exposure all the banks have.

Secondly, people have been emailing me asking what I've been up to and why I haven't posted more frequently. Well, as some of you might know I'm in night school at Washington College of Law at American University. (I should be reading right now actually)

Oh and I also got married!

Anyhow, don't fear. I'm still sharing my thoughts, but more so over at my WheelEstateCam on Youtube. I attached the camera to my steering wheel and I take you for a spin as I head over to class. The "Video Blog" was featured in Friday's Washington Times. Make sure you subscribe to Youtube.FranklyRealty.com

Here is a round up of my recent Video blogs:

Lending Tree blows. How to Pick a Lender & today Close call closing.

4 Bank Tales: 22 Offers, Destoyed HVAC, Verbal counters, Bank Required lenders

FranklyMLS.com 101 New E-mail Alerts. NO Passwords! How-To Video. This video is particularly cool. I have been constantly upgrading FranklyMLS.com. No MLS search site site comes close in terms of speed and massive amounts of data at your fingertips. Even other buyer agents use it!

"Wheel" Estate Cam- Bank Foreclosure Bidding Wars (the first one!)

Redfin- Debating their "Real Estate Science"

Need to Sell before you can Buy? Some Options.

And a little shout out to NVAR (Northern Virginia Association of Realtors) for their new Youtube channel to promote Realtor classes. Watch (the class is on Nov 12 2008)

So if you don't have a Youtube account, you can sign up for free and subscribe to my Youtube Channel and get emailed when I post something new.

Oh, and yes, I'm still doing real estate! (plug: in case you need a Realtor)

Written by: Frank Borges LL0SA Broker FranklyRealty.com

ps. Please send me any typos

Don't Buy Our Listings! Staging Required

2008-08-05T14:40:00.010-04:00

Don't Buy Our Listings!?
Why?
Because they are Too pretty. Too staged. Too well marketed.

Our listings NET sellers more (not buyers). Many agents will tell the sellers, "I can get you top dolla' " (or they BUY a listing) and then turn around and tell buyers "this is a great 'deal'!"

Well, you can't have it both ways.
Is it a good deal for the seller or the buyer?
(like this 2 faced Realtor commercial)

Am I worried that this post might turn away buyers for our listings? Nah.

Does anybody really read this?
People buy from the MLS, not blogs
3rdly (is that a word) they know I'm exaggerating (a little).
Lasterly (now that I know is not a word) the buyers will be compelled in our trance, like bugs into a zapper, and this post won't matter. They will love the place and still HAVE to have it.

(shameless ad coming on..) FranklyRealty.com is the only Real Estate Company in Virginia (and probably the USA) that requires staging for each listing. All part of our slogan Excellence Comes Standard TM.

Do we lose business from it? You betcha. Not only do we lose clients that want to just throw it up on the MLS, but also agents that were considering joining but were scared to lose clients. (His current listing should have been staged, it wasn't, and now it just sits).

I also lose watching a deal that we "lose" and watch it sit... and sit... and sit.

Why require this? Because:

It works and
So few do it.

Upon reviewing 400 homes in Arlington Virginia from $350k to $800 on the MLS.

Over 400 homes
Only 7 had 30 photos (our MLS's maximum) and of those
Only 4 of those had staging.
75% (3) of those were our listings. (see them here)

Still wanna go with the big boys? If you do, pick any of the them that did a great job on the 393 listing.
Quantity matters right?!

Hello! Wake up! We are in a "buyer's market" with competition from dumpy bank listings, it is a no brainer.

(sidenote: Buyers, we should get you a smelly bank place and make it look like nicely staged place. Or save $15,000 buying a photoless listings)

Now I would rattle off stats offered by the staging world about selling for 6% more, but I don’t believe in stats. Instead I see as a buyer agent, that only 1 in 30-50 properties are staged (and only 1 other non-Frankly listing out of 400 was staged and had 30 photos) and my buyers love them (but I prefer they get the stinky unstaged home).

And when I do my listings, the buyers at open houses comment “do those drapes come with the house.” You shouldn't be looking at drapes when you buy a house... but people do! I even had one buyer look at a listing and fell in love with the décor in the bathroom and subsequently bought the townhouse.

I recently sold my Mom’s house and I did more than staging (about 60% of our clients do more than just staging). Here we did about $17K in redesign on a 27 year rental (I hate construction, so it was 100% outsourced). If I didn’t believe in staging, would I still have required my Mom to do it? As I mentioned in my "best ever" post: Frankly CRA, we got:

100% of LIST PRICE in 4 days & 3 agents said it was overpriced.

My best friend in Chicago wanted to sell his place and needed advice. He is the “Frank tell me exactly what to do” type. I believe in staging so much, I worked backwards. I went to a top stager in Chicago and said, “Got any tech savvy Realtors that stage?” He recommended Eugene Fu (A year later featured as a top agent under 30 in Realtor magazine). Sold in four days for $10K over list.

My sister is about to sell in Seattle. What do I beat into her? Staging (she was already sold at Hello after seeing my mother’s house transformed).

While “staging” is the minimum that we require, more often than not there is some more serious re-designing needed. Sometimes granite, sometimes new appliances, chair rails, etc. Usually not new cabinets or new windows. Not just your $25 staging book and a box of hodge podge junk from Kmart (so yes, even staging has levels of service).

So why require it? Because (warning, cheesy line coming up!) my clients are like family*. (Told ya! * Yes that was a joke, I don't talk like that)

No seriously if I make my best friend, mom, and sister stage, how am I going to let a client say, “Nah, just put it on the MLS and see what happens?”

Actually even my mom said that. I said, “nope, all or nothing.”

So while it might lose us signed listing agreements, at least our stuff sells faster and for more.

Like what you read? Subscribe via email (upper right of blog) or forward it. Don't like it? Then comment.

- Written by Frank Borges LL0SA- FranklyRealty.com

(Disclaimer: Now don’t get me wrong. You can’t just wave a staging wand and it is sold automatically. Other things matter, like proper pricing (not under pricing) and (see entire blog section on listings) sometimes a staged place won’t sell, but it works enough to require it.)

Photcredits: Don't buy by WhatWhat, Chicago by Laffy4k Bug light by Lara68 , sit by naraekim0801 , Wake up by galapogos

Buying Bank? Hurry! & Wait...

2008-07-30T02:05:00.004-04:00

I just got a bank owned / REO property under contract. Was previously $800k, and it was now listed for $400k.

We had to bid on 6 properties before finally "winning" one (ask how we "won" without having the highest offer too!). Wow was that a pain. And people say it is a "buyers market" with tons of inventory? If a home is priced right, it will sell FAST. The key is to get daily MLS email alerts! (or ask for hourly)

So, I haven't figured out to what degree the hassle was with the listing agent or with the bank itself.

First we have the overloaded listing agent problem.

The banks don't like changing who their "partner" Realtors are. Once they like one, they dump on them dozens and sometimes hundreds of listings. So the agent is overwhelmed. The listings get thrown onto the MLS with the 1 free "driveby photo" that the MLS provides (thank God for FranklyMLS.com where buyer agents share 30+ photos of these photoless properties).

And if they have 20-40 properties, they get swamped. Their voicemail fills up and emails get ignored. Recently I put in a lowball for a bank property (see why Lowball offers don't work) and 8 days later, after 3 ignored emails and a couple phone calls, the listing agent had no recollection of her "got your contract" email that she (or an assistant) sent, and then was like "oh sorry they rejected that last week, we shoulda told you." Of course this makes the buyer agent look horrible to their buyer, since it is inconceivable that the listing agent would be so non-responsive.

But the problem is this is becoming the NORM.

Then we have the overwhelmed banks losing $100,000 per deal.

Sometimes listing agents don't even have a phone contact at the bank. They just enter in the price and terms (don't forget that terms DO matter!) into a website and they wait, and wait.

The listing agent can't bug the bank and say "hurry up" since they will get fired. So they wait.

The bank rep has no incentive to do anything quickly. No bonuses, no commissions. And the longer they wait, the more likely another offer will come in (ie good for banks). Buyers LOVE putting offers in once another person puts in an offer. It knocks them off the fence, and into the market.

Put a deadline? Yeah, like that will work. They don't care.

Put an escalation clause? Nope, they just cross off everything and put your max price as a counter.

So REOS are still 10x better than Short Sales, but expect to wait. It can take a week just to get a reply to your offer. How is that for sleepless nights.

How to write a strong bank offer.

Don't forget TERMS! While banks care about price, they care about TERMS too. They too frequently see deposit checks bounce, or people back out after the inspection. So if you make your contract as lean on contingencies as possible, it can help you get a LOWER price. Yes, if they think you have a 95% chance of closing, but you are $5,000 lower than another buyer that they think has a 60% chance of closing, they will take less money (obviously not always, but you get my drift). I still would NOT recommend buying without a home inspection.

Run a FranklyCRA to see if you can find some trends with that bank or the listing agent.

Multiple offers at once? This is tricky. For the most part, legally (I'm not a lawyer yet) you can not do this without fully disclosing the fact to all parties. Saying "I'll use the condo docs to get out" if both ratify at the same time, that doesn't work (since you broke your obligation to the contract BEFORE your rights to review the condo docs kicked in). But I did get legal counsel on how one CAN legally obtain the same end result (ie multiple offers out at once). I'd love to write about it, but then I would be giving legal advice, and somebody in North Dakota would sue me after taking my advice and something went wrong.

DO NOT REMOVE THE HOME INSPECTION. It might be tempting to remove the home inspection, but that is a little too aggressive for me. Actually many bank addendums will put BACK IN the inspection (that was a really important point, but you probably skimmed and missed that) for liability purposes. Some people have run inspections BEFORE putting in the offer, and others can have the inspection with a "take it or leave it" language in the contract. Don't do the "informational purposes only" garbage. (sidenote: if I get that when I am the listing agent, I say, "feel free to inspect it after closing, since it is only for informational purposes." I got burned too many times with that one!)

Don't make your closing too soon. If you put in 30 days, and it takes them 2 weeks to sign it, you have 2 weeks to close. Consider "Within 40 days from ratification date as chosen by buyer."

READ the bank addendum (see post)

(Sidenote/update on Short Sales. More are closing. Before I called them "Fake Listings" since only 1 in 20 was closing, then I made a Top 10 Short Sale Questions to ask before considering short sales. Previously 3 had closed in all of Arlington in the last 6 months. Now I would guess it is more like 1 in 8 short sales close. And in my building at Clarendon 1021, 3 or 4 have closed in the last few months. If the listing agent has short sale experience, the close rate can jump to more like 60%-70% (after 2-3 grueling months).)

Want more?

Make sure to subscribe via RSS or email (spam free).

-Written by Frank Borges LL0SA- Broker FranklyRealty.com

Also read Tony Arko's: Are Foreclosures Listing Agents Leaving Thousands on the Table?
Report typos please. Photo Credit: 50% off by Robert Brook , Sheep and Wolf by manitou2121 Wideload by The Web President Squirrel on Fence is by Gilles Gonthier,

FranklyCRA: A Comparative REALTOR Analysis. Unleashed.

2008-07-22T12:41:00.006-04:00

(Warning long a** post, but my best of year.)

FranklyCRA: A Comparative REALTOR Analysis. Unleashed.

Imagine legally eavesdropping onto the conversation of the listing agent, with buyer in tow.

You know, the one that goes like this, "Well, in my experience I think you should..."

Well what if I could tell you there was a way to know what that experience exactly was? Trends that the other agent repeats. Yep, and I have been doing it for 4 years.

A REALTOR friend that I taught this technique to, and works for one of the big boys said, "No Stop, Don't Tell Anybody!"

So, could that be interesting data? Maybe? Maybe not?

DEFINED: Frankly CRA (tm) technique where one agent can run a report to view the last 5-50 sales of the other agent. Showing you their style and pattern. Are they an overpricer? Are they a weekend warrior, do they create bidding wars? I find it even more useful then the traditional CMA (Comparative Market Analysis). Note this is just 1 of a dozen techniques to figure out a strategy to offer on a place.

Example 1: FranklyCRA on a listing agent, it helped us get a LOWER price.

I found that she was a "chronic overpricer, 30 day price dropper." And recently she had 5 deals where she dropped the price exactly after 30 days. I had a buyer interested in paying near full price. It was 28 Days on the Market. After looking at the report, we know that she already whispered into her client's ear that it was time for her "usual" $25,000 price drop soon (also she then sells them within 4 days thereafter). So we offered $30K below list, and we GOT IT. The client was willing to pay more, so they were thrilled.

I was rebating at the time see “I used to rebate, but then I got good.”

Is it cheating? Nah, it just has to do with knowing how the MRIS database works and putting sold data to good use.

This information saved them $5-20K since they really wanted the house and were willing to pay more. They didn't care about my rebate, they just cared about the unexpected savings that I helped them get. At that point, my focus turned to saving people a greater NET, vs handing over my commission to get more business (a great strategy for newbies and pencil pushers).

(Side note: Why do some Realtors always overprice? See “buying a listing”).

But Frankly CRA can also show you data that might lead you to spend MORE! What! Another scam! "Trying to have your clients overpay so you get more! You should be arrested, sneaky bastard!"

No. Settle down Beavis.

How can that be good? Well data is king, and it is all about VALUE, not about % off list (see Lowball Myth video).

Example #2 Another listing agent look up resulted in a HIGHER offer.

My buyer found (sidenote: usually my buyers prefer to do the 6 hours a day of searching, like a hobby) a $350K TH in Alexandria. It was the 1st week on the market.

My client says, "I need this house, I want to offer $20K off." My reply is, "Hold on we aren’t Redfin" (no offense, I love Redfin, but their model is different, their buyers call the shots and even submit offers online.)

I ran a Frankly CRA report. Turns out the agent is a “proper price, fast seller”: 8 of his last 10 sales in that exact community sold within 7 days for full list. That, coupled with a ton more data… "do you still want to offer $20K under, or do you want to actually buy this place?" (side note: It is easy to get caught in the Vegas style machismo of getting a "deal" and lose the focus which is to find a home for the right VALUE, VALUE,VALUE, not %off, %off, %off, for that go to Bloomingdales.).

Sure we could offer less, but my stats showed we would have a 20% chance, and actually make it easier for them to sell it to somebody else (people love making offers on places with offers, subscribe to the blog, I have a detailed diary of a bidding war coming soon).

As an alternative, we could go buy the $50K overpriced place for $30K under list (ie overpay by $20k)and you can brag to your friends, or we can strategize to keep this from getting bid up.

This blog post would be too exhaustive to go into more detail (and there is a ton), and no we didn’t “just offer list.” Just last week I won a bank property, and we were NOT the highest offer. Smart offers (like ones where you tell the listing agent you will risk your entire commission because you are confident you will close it on time.)

Example 3: Frankly CRA uncovers Weekend Warriors and Newbies.

It can show me if an agent is brand spankin new! If you think I don’t take a completely different negotiation strategy with a newbie, vs a 20 year veteran, then I hope you hire one and I get to be on the other side.

Also do they tend to do $200K deals and we are selling a $800K place? Is the agent from MD and somehow got stuck in a random Arlington listing? All this intel matters (at least I think so but I might be full of it?).

Example 4: Frankly CRA to look up the BUYER AGENT's background (when I list).

I sold, and closed, my mom's listing to a new agent in 4 days for full list. 3 agents said it was overpriced. What a compliment. Reputable agents (including one of my own, and one on the board) said it was overpriced, yet we got full list (sign up for blog, that detailed post is coming soon)

Example 5: Frankly CRA to look up actual sellers/owners prior 10 year selling history (when I'm the buyer agent).

This seller had a $1.8 million home in Great Falls. I did a look up for the last 10 years. They were owners of two other properties (300K + 700K). Each took 200 days and sold exactly for 15% under list!

Unknowingly, our offer, based on a ton of other metrics was also 15% under list. Coincidence? I think not. The seller was a "15% overpricer, long holder."

Starting to sound like ordering at Starbucks? (Something I still can't do right)

Again with builders. Either within one condo building or if they sell 5 houses a year, run a Frankly CRA on their Realtor coupled with that exact builder. What percentage below did that $1.2million builder take last month? Do you think that might be relevant? I think so, but maybe I'm just a data guy. Maybe what really matters is your gut feelings?!

A good friend of mine bought a detached home new construction builder (he used his aunt, who was a Realtor). He was going back and forth. They were within $20k of list. It was 100 DOM. He bought it! Without telling him, I then ran a Frankly CRA. The builder recently took $50k below list for the same DOM... might he be bluffing... very possibly. (Oh well, at least he can save face with his aunt at Thanksgiving)

Example 6: (New) Frankly CRA on Banks!

Some banks will price aggressively and get bid up. Wouldn't you want to know about the bank's last 10 deals and how 7 went over list? Well you might not be as quick to lowball on day 3, now would you be?

Related background research... Look up a listing agent's last 10 deals and contact some buyer agents for those deals. Ask them, "Hey when you bought that place, was there a ton of back and forth, or did they take your first offer?" Or "Hey, I see you got $50k under, did you all come in at $50k under, or did you start at $80k under?"

So all of the above just scratches the surface of what we do. Part of me wants to bury this post, so the competition doesn't know what we are up to, but part of me says it doesn’t matter if the other side knows our strategy.

WHAT IS THE POINT?

It is important for consumers to know the difference. Not all Realtors are paper pushers, and a good one can actually save you money. Our company is NOT just bullet points, or a checklist of services to see whose list is longer. This stuff isn’t taught by the cattle call-take-everyone with a heartbeat large firms .(test that theory, call your favorite large company and say you are thinking about getting a license).

This STUFF (and other stuff, ie subscribe to this blog) NETS YOU MORE.

If you already have an agent see if they can run a Frankly CRA for you. If they look at you funny, send them here for the bullet points. Also, if you haven't already, make sure to check out the Wiki MLS, FranklyMLS.com

If you read this via RSS, or email, come back to Blog.FranklyRealty.com to read the comments and add your own.

Written by Frank Borges LL0SA- Broker FranklyRealty.com

See you at INMAN!

(please report typos, so I don't look dumb)

Admin Fees, MSNBC & 515+ Comments.

2008-07-12T00:43:00.005-04:00

In case you missed it, MSNBC's front page linked to their RedTape blog which ran a little piece on bogus Admin fees. My 2007 admin fee post fueled part of the article. So far there are 515 comments over there, and 5,000 unique visitors over here.

I hate admin fees. Never charged them, never will. (kinda like Sprint)

Just a couple of corrections to my quotes in their post (which they are working on).

1) I initially estimated that admin fees were charged on 40% of deals. I guess I was being conservative. That is actually more like 70% based on 20 recent HUD1s that I pulled (not charged by us, but by the other broker). Also to clarify their post, I don't know if these fees were agreed to in the initial consultation, or were just sprung up at closing.

(even if they were brought up initially, they are still bogus if the client doesn't know better, ie they don't subscribe via email in the upper right corner of my blog. )

2) They quoted me as saying that "many agents" are allowed to keep the admin fees charged by brokers. I actually only know of 1 (maybe 2) agents/brokers that do that. If that was prevailant, it would be EVEN WORSE and I'd go and become a lawyer for the class action on that one! (oh yeah, I got into a law school. I start in the fall.)

But the point wasn't missed in their post. Agents aren't completely innocent in their "Sorry that is company policy to charge this." excuse.

Agents that are with firms that charge bogus admin fees are part of the blame.

Why? Isn't the broker solely to blame for charging this?

No. They are charging that fee, in part, because they can't make enough from the agents. Why? Because the agents are demanding better splits. (and they have big offices)

Exaggerated Example/Scenario:

Agent A is with 123 Realty that offers a 60/40% split (firm get 40%). And this 123 Realty charges no admin fees to clients.

Agent A gets courted to move over to 789 Realty. They offer 70/30% split plus a $300 per deal admin fee (that either the agent or the client has to pay).

So when Agent A moves over to 789 Realty and then says to their client, "Opps sorry, this firm charges $300 more per deal, nothing I can do about it. What? You want me to eat it? Heck no, that isn't 'fair'."

Meanwhile on a $10,000 commission, the new company "gives" the agent $1,000 more.While charging $300 to their client.

Another thing that sucks about admin fees is I will see the SAME company charge them one day, and not charge them the next day with a different agent (at least not on the HUD1). So either the agent ate it offline (not HUD1) or they stood up to their broker and said,

"Not only am I not paying this, but I'm not passing it on to my client. Mr(s). Broker, if you don't do this, I'll switch over to FranklyRealty.com (if they will take me, no newbies sorry)."

But sometimes brokerages ARE to blame.

Some brokers will start agents off with a 45/55% split (55% for the firm). But of course the $5,500 out of that $10,000 doesn't cover "admin." What? Is that $5,500 profit and the $300 is to cover xerox copies (admin)?

Anyhow, thanks MSNBC for blowing the cover off this garbage fee. I hope to help you expose more Realtor tricks.

Tips for Realtors: Tell your broker no. But if you are on a 100% split paying $200 per month, you better believe they are going to charge "admin fees." Or push you hard toward their Affiliated Business.

Tips for Buyers: Hell no. Buyer Agents advertise their services as "free." Not "Free*" with a $300 fee.

(I never say I'm "free." Yes technically the seller pays, but the buyer is the one writing a check at closing, and a part is coming to me. I realize that. Thank you. I hope I helped, and you found it worth it.)

Tips for Sellers: Well this is tougher. At least they aren't saying their services are "free." They are saying their fees are XYZ% plus $300. You always have the right to go negotiate the commission split AND/OR the admin fee. But remember, that doesn't mean the listing agent has to say "yes." With your right to ask for less, is the agent's right to say NO. (nothing wrong with discounting or rebating. I write about it here... "I used to do it... but then I got good decent.")

Tips for Brokers: Just because everyone else is doing it, that doesn't make it right. Also go cut some overhead. The world is virtual. Get out of the 0.5 real estate world and join the Web 2.0 world.

- Written by Frank Borges LL0SA- Broker FranklyRealty.com
(please report typos)

Don't Use Tax Assessments to Value a Home!

2008-07-02T16:42:00.007-04:00

FranklyMLS.com now offers in the spreadsheet view a % Difference between the Tax Assessment and the List Price. But I'm here to tell you that I see too many buyers giving TOO MUCH weight to the tax records and tax assessments. (So why offer it? Well cuz you want it anyway).

Problems with Tax Assessments on the MLS:

1) The MLS freezes tax data on the day the home is listed.

Example: Last week the MLS finally refreshed the data for all of Prince William County. Homes listed before June 25th 08 will still show the $50k-$150k HIGHER 07 data. So you might try to compare 2 tax assessments find 1 being taxed at $600,000 and a much bigger house next door, showing up as taxed at $500,000. (If enough people ask, I can make FranklyMLS.com show the tax year in the spreadsheet mode)

Problems with Tax Records & Former Sales Data

1) They don't show seller subsidy!
Sometimes the subsidy can be $30,000. So you think a home sold for $500k, but it really sold for $470,000 net. On the MLS the seller subsidy must be disclosed. (except when seller subsidy is improperly hidden)

(Sidenote: I'm big on stacking seller subsidy, as much as the lender will allow. The seller cares about net, but it is my opinion that a higher recorded price will help your resale and the neighborhood, especially those that think Realtors are worthless and get their data only from the county. Also it can get you into a loan with a lower rate, just ask for details.)

2) 30-90- days behind. Sometimes months behind the MLS Sold data (not available publicly).

3) Bank Sales Price is inaccurate. If you see a home that was $500k in 05 and the bank "pays" $300k for it last week, don't think that that was a real transaction and somehow their break even is really $300k. Otherwise you could have bought it for $301k (which is not the case).

Problems specifically with Tax Assessment

1) Owners fight to lower their Assessment. DON'T FIGHT THEM! (see post)

My mother used to always do this. Great she saved $25/mo, but now buyers sleuthing the tax records, incorrectly think her home is worth $40k less.

2) Little rhyme or reason.
Nobody knows exactly how the computer in the sky picks the tax assessment for a unit. Rarely does it account for upgrades, view, facing Rt 66?, etc.
For example 2 units in Clarendon 1021. One is a 600 sqft studio, one is a 600 sqft 1bdr. Both bought for the same price. That extra wall somehow makes the tax assessment 10% higher.

Benefits of Looking at Tax Records

1) Free Sneak Peak on Bank Listings Coming Soon.
Look for a "nearby sales" link and discover bank owned homes that have not hit the MLS yet (most eventually do). These can take 1-2 months, but knowing about these can be very helpful in negotiations or in deciding what/when to buy. (ex: Arlington Tax o n building 1021)
(Sidenote, was that tip helpful? That is just the beginning. Subscribe or email me.)

2) Verify MLS Data. Is it really a 4 bedroom? Is the agent trying to sneak in another non-legit bedroom? The tax records are a good place to verify this data and square footage data.

Too frequently I will get an Excel spreadsheet from a well intentioned buyer, based on the Tax records. Who needs a stinking Realtor anyhow right? Sorry, but it tends to be all wrong.

You don't know what you don't know. (upcoming post)

Sure, I'll take a peek at Virginia Tax Assessments & Records, and see if they reveal anything interesting, but I won't rely on them too heavily.

Written by Frank Borges LL0SA- Broker FranklyRealty.com

(please report typos)

FranklyMLS.com, 1st to Scrub for Short Sales & Post Article

2008-06-15T12:04:00.013-04:00

In a long list of "1sts", FranklyMLS.com is now the 1st Virginia/DC/MD MLS search engine that scrubs for Short Sales! (maybe the 1st in the nation). Also see my quote today in the
Wash Post, and my other articles defining Short Sales.

On the FranklyMLS.com spreadsheet results page, try a search for Alexandria, if you see an asterisk next to the price, that means it is "probably a short sale" (if you see a yellow highlighted home, that is a reviewed home by a buyer agent, with extra photos.)

Watch the video example below. (email readers go here).

How do we know if it is a Short Sale? Since only 17% of Short Sale listing agents check off the "Short Sale" box under Current Financing, we also crawl the Public Remarks for the phrase "Short Sale" and "Party Approval". (Soon we will unscrub those that say "Not a Short Sale" ie, no asterisk Update6-16-08, this is now complete).

Why do you want to know which are Short Sales? So you don't get your hopes up. There has been much discontent amongst buyer agent Realtors, some even calling for a complete ban of Short Sale listings on the MLS since so many are "Fake Listings." (but they are starting to close, more soon on this, so subscribe to this blog). But now that we give them an *, you can quickly see which are which.

If you see any inaccurate asterisks, or ones that should have an asterisk, please let us know, and enjoy!

- Written by Frank Borges LL0SA- Broker FranklyRealty.com

FranklyMLS.com 101: DOMM vs DOMP Days On Market

2008-06-04T19:07:00.004-04:00

New Series: FranklyMLS.com 101

#1 What is the difference between DOM-M and DOM-P?

Both of these terms refer to Days on the Market for a house for sale.

DOM-M stands for Days on the Market-MLS. Or the number of days this exact MLS listing has been on the market (not the home, but the MLS#).

DOM-P stands for Days on the Market-Property (other states call it C-DOM Continuous Days on the Market). So regardless of the number of different Realtors, or same Realtor relisting, it shows the total number of days the property has been for sale. (A house has to be off the market for 90 days to reset to 0 DOMP see details on MRIS blog)

I have found that the average MLS listed home in Northern Virginia drops 8% (including seller subsidy, see older post) from the real first MLS listed price (sorry, but no public MLS system shows the starting price if it was relisted).
However a home that sells within the first 10 days sells for only 1% below list.

(sidenote: Some disagree, but I have found a strong correlation to DOM and % off list price. The longer it sits, the lower it goes. I even created something called the Frankly Price Predictor, where I give an estimated price for Active listings based on the Days on Market. Should I put that back on FranklyMLS?)

FranklyMLS.com is one of the only sites (out of 33, see all here) that will show you both the DOMM and DOMP (most show neither). See a sample search for Arlington Homes. We think it is important to have as much data for the consumer as possible.

Examples: Property has been 85 days with one Realtor, and then 10 days with another. That would show up as: DOMp/m= 95/10

Tricks: Where there is data, there are Realtor tricks (more here on MLS DOM fudging).

Fat-Free Fudge (ie legal). An agent relists their own property in order to reset the DOMM (but not DOMP). This is allowed. I don't like it and it has a ton of drawbacks (like buyers that have your homes saved, suddenly think it is sold). Advantages: a) looking like a new listing for sites that don't show DOMP b) The "Original price" is reset (only a few sites show this as well).
Full of Fat Fudge (illegal). An agent manipulates the tax data with ID # 00000 so that it resets the DOMM and DOMP. The fine for this was $50. After my expose' was mentioned in BusinessWeek, the fine is now $1,000. Blogging for a purpose= Priceless

FranklyMLS 101 Continued: #2 What is the "Original Price?"

This is the starting price for this one particular MLS listing (or DOMM) and NOT the starting price of a previous listing for this home (DOMP).

This is kind of confusing, and misleading (I didn't make the MRIS system). So if it was listed 50 days ago by another Realtor for $50,000 higher, under a different MLS# that will not show up as "Original Price."

But if 1 Realtor has it for $300,000 and then 30 days later that same MLS listing is dropped to $285,000, the "Original Price" will come up as $300,000 and the List Price (or Asking Price) will be $285,000.

- Written by Frank Borges LL0SA- Broker / Owner FranklyRealty.com (report typos)

Grandma Thinks I'm Broke & Finding A Realtor & Wife Online

2008-06-04T13:24:00.003-04:00

My grandmother thinks I'm broke!

The other day she calls me and says in a thick accent,

"Are you still able to feed yourself? Why are you still in Real Estate."

I asked why, and she proceeds, "I keep reading in the paper that the market is tanking."

I assure her that even though gas prices are higher I have just enough to still buy food.

Three years ago if you said you were a Realtor, it was like E.F. Hutton. Strangers would be caught listening in and people were impressed. (sidenote: I got stuck bookless once and picked up a 1993 book by Peter Lynch of Fidelity. I loved his insight saying that the market turns down not when he starts getting advice from friends or his dentist, but when he starts considering following their advice!)

Today it isn't just my grandmother, but others cringe or feel bad that I am in Real Estate.

But after I use the pity to get a free beer, I tell them that business is doing great!

The weekend warriors [agents] all packed up and went home. Fewer agents and the explosion of the blogging world and things are great.

Nah, I'm not making a "killing," but don't want to be. I like a balanced life.

Did you know I get 80% of my business from this blog, and I get to be picky and take on fun and great clients!

BUT I am pretty bad with the initial contacts. In part since I get so many bogus requests. But once a match is made, they get my full attention... and my cell phone number. (see, Sorry, I don't answer my cell... unless)

For example, just the other day I got an email from somebody that already spit out 2 Realtors. Why I can see one being lazy, but 2? My bet was it was an unrealistic client and I don't have time to find them the impossible.

Another barely remotely related story, I was using my new live chat feature (on Blog.FranklyRealty.com) with somebody at 1 AM the other night (It tells you if I am online). We were chatting and I was talking her out of building a home in McLean (where I grew up) and how it would cost more etc.

Then she told me she had a bad experience with her former Realtor with her last home. I then asked "Was it a rebate company?" to which she was amazed that I was dead on! (disclaimer: Rebater does not = bad, see my blog where I say "I used to rebate, but then I got good").

Then she proceeds to tell me that during this round of buying she is disappointed in her current Realtor. Especially her lack of a financial understanding to which I asked... "Let me guess," and she said "Oh no, not again," and

I said "So is it a cousin or aunt Realtor?" Bingo! Deal or No Deal! "Yes" She was amazed. That will have to be for another post, "But My Cousin is a Realtor." (make sure you subscribe to not miss it!)

What does this have to do with my grandmother thinking I'm broke? I dunno. Probably somehow, but I forgot.

Anyhow, business is great.

I just wanted you to know that you aren't the only one looking online to hire a Realtor... And heck for those that say it isn't personal enough, I found my fiancée Carrie (as of last week) via match.com, so why not a Realtor?

-Written by Frank Borges LL0SA- Broker FranklyRealty.com(please report typos)

Financial Advisors vs Monkey Throwing Darts, Like REALTORS?

2008-05-01T01:18:00.003-04:00

Disclosure: I am not a financial advisor. This is not financial advice, and you'd be an idiot to follow what I do personally.

I personally only own ONE "stock", and that is called SPY. The #1 bought and sold stock in America, meanwhile most individual investors don't know about it.

It is an Index Fund (also called an EFT, Exchange Traded Fund) that has all of the S&P 500 rolled into one stock with virtually no fees and no annual maintenance. Motley Fool wrote that "3 out of 4 mutual funds don't beat the market." (ie SPY)

So why not just be average and beat 75% of the funds every year?

The Wall Street Journal used to have a competition. They would have a monkey throw darts at a group of stocks and compare the results to the experts. I believe the monkey repeatedly won. What does this mean? This means that the market is too efficient for somebody to consistently beat it.

Just yesterday my girlfriend asked me to review what her financial advisor sent her. It was 25 pages of gibberish. It appeared as if the entire intent was to confuse the reader into thinking, "Wow, they really must know what they are doing, I'll just tell them YES." (Sound familiar? Some Realtors take the approach of, "overwhelm the client with BS to scare them into signing.")

So, I looked up the 10 Mutual Funds in her report. I compared them to my SPY and I was impressed... my monkey theory was blown. 8 of the 10 blew away the industry average (S&P 500 & SPY). This couldn't be... So I had her log into her account. I then looked at what her account had. They were totally different mutual funds!

Upon rereading the manifesto, those well performing funds were the "RECOMMENDED funds" for the future. Are you freaking kidding me!!? The funds she owned did horribly! Probably 10% worse than SPY! So what they did was take 10 random funds that DID do well and say "we recommend you buy these, look how well they did, you will do great next year." Are you kidding me?

So much for a long term plan to leave the funds untouched for 5-10 years. The worst thing you can do is dump the under performing ones (all of them) every year and chase the next big thing. (Re-Disclosure: Ignore me, I am not a financial advisor).

Oh yeah, for those that don't know, there is something called Churning an Account. Sometimes they only make money when they buy and sell, not when it sits. So not only did their initial picks blow, they now want to sell and rebuy new funds to get another round of commissions.

What did we decide to do? We sold everything (they were down from the purchase date, so no taxes, actually a tax break). And we bought just SPY (The S&P 500 rolled into 1 "index" stock).

Why haven't you heard about the #1 stock (in volume, look for yourself) being bought and sold in America everyday!??? Because the financial advisors make squat on it! And magazines are always looking to beat the market and promote their advertisers (mutual funds). Nobody gets rich pushing SPY.

Even the torch bearer of truth, the Motley Fool, figured out that they don't make money on pushing "dumb" reliable and outperforming SPY, instead they receive millions from Mutual Funds to sell their products. This link even talks about how 75% of mutual funds stink and their theory on how to find that 25% (which is nearly impossible in the long run, but they make money watching people try!).

Compare your funds to SPY here, and report back in the comments.

(Sidenote: One reason to consider NOT unloading your funds would be the tax ramifications. For my girlfriend's IRA it was a Tax-Free no brainer so we sold and converted to SPY last year, but we held off on her other funds since she would have to pay capital gains for the gains. Now that the market has pulled back, and they are nearly all losses, we are cutting bait and switching to SPY. By the way, we would have been much better off if we had paid the tax and swapped last year.)

For those consumers that hate Realtors as much as I hate this one particular financial advisor, I now better understand them.

Hopefully by explaining better what we do, and talking straight, and not feeding you BS, we can separate us from Financial Advisors like this.

I'd love to hear from a Financial Advisor and debate the practice above.

Please correct me. Show me what I am missing (I really want to know!). Nobody in the history of mutual funds has consistently beaten the average, so why buy Mutual Funds which:

Start 1-2% behind every year in management fees (don't be fooled by "no-load" funds, they got fees)
Only have a 25% chance of beating the average, with all the downside risk of doing much worse
Paying a fund manager $400,000 a year, and he can't even beat a monkey.

Discuss...

Also I am making no opinion on whether or not to get into the stock market, but if you did, how did you decide what to buy?

Feel free to forward this post, and don't forget to sign up via email for future posts in the upper right corner of Blog.FranklyRealty.com

Update 6-1-08: I just went to a wedding and ran into a Financial Advisor that was not happy with this post. Saying that he is going to tell people to go FSBO and not use a Realtor. I think he missed the point and missed a great opportunity. I want to be corrected! I want somebody to come in and help my misunderstandings and misconceptions. I blog so that consumers better understand what we do, and a good Financial Planner should take this opportunity to help everyone understand how a good advisor works (feel free to add a link to your site even, or contact info).

- Written by Frank Borges LL0SA- Realtor (not a Financial Advisor) Please report typos

Read more here at Motley Fool: Why ETFs [like SPY] Beat Mutual Funds

Market Bottom ALERT! I have 100% Proof!

2008-04-22T11:10:00.004-04:00

I officially have 100% proof that we have officially hit rock bottom.

No other indicators from NAR or the government have been as accurate as the proof that I have. I found a 100% correlation!

When My MOM SELLS, THE MARKET SKYROCKETS shortly thereafter!

The chart to the left is factual. Actual points when my Mom has sold her property.

The last arrow is from a recent listing which is now under contract. (see listing, check out the photos and collages).

So there you have it. No more need to think. I have always been against the NAR campaign that says "Buy Now," but now I can show proof that NOW is the time to buy! That market is going UP UP UP!

Thanks Mom, for taking one for the team and helping us all out by single handedly turning markets around!

For my previous prediction on the EXACT best day to buy, read my Market Timing post.

Not a subscriber? Add your email to get spam-free blog posts sent to your inbox. Upcoming posts: My GrandaMa Thinks I'm Broke. Also don't forget to comment. Bloggers like comments.

- Written by Frank Borges LL0SA- Broker FranklyRealty.com

p.s. Please report typos

The First Wiki MLS: FranklyMLS.com LAUNCHED!

2008-04-08T13:29:00.012-04:00

I am officially launching FranklyMLS.com, the The First Wiki MLS!

Where BUYER AGENTS, in Virginia and DC, from multiple brokerages come together to ADD information and photo albums to listings they visit. MORE DATA & 1,000+ MORE PHOTOS!

THE "OLD 1.0 WAY": (see all 31 MLS search engines here)

1) One-Way Information. "Here are homes for sale, as marketed by the listing agent. Take it, trust it, or leave it."

2) Photoless MLS Listings!

Sure they sell for $15,000 less but they are a pain for everyone. Oftentimes foreclosures or a listing by an underpaid or sucky agent have no photos!

3) Confusing Branding.

Who is selling what? Each of the 60,000 MLS listings are plastered with one "Brought to you by" buyer agent from one brokerage. I tried to explain: "No, I am not listing 1,298 homes," but it isn't the consumer's fault, it is confusing! See my account on Homesdatabase.com/frankly a service that many agents pay $30 a month for. My annoying face on each listing.

4) Limited Data or Sign-In Required.

All but a few sites have stopped the practice of requiring users to create an account and login in order to see listings. Also many sites will NOT show you all the data possible. Some even hide the addresses so you have to "call your local trusted Realtor!"

5) Fancy, & Feature Filled, But SLOW-

Some of it might be useful, but it slows down the website. Their goal is to have such perfectly targeted results that it can take minutes to find something.

6) Small photos. As our monitor resolutions get higher, the images get smaller. On my screen most MLS sites show 4 inch photos.

7) Computer based. No focus on cell-phone ready searching.

The "NEW 2.0 WAY": FranklyMLS.com

1) Wiki it!

(Attn Buyer Agents, do you have a progressive office? Let me come and talk at your Tuesday meeting so that more Buyer Agents can get involved.)

The World's First Wiki MLS. No, we can not CHANGE the listing itself (or the price!) as presented by the listing agent. What we do is ADD comments and photos to the listing and as a community flag and remove inappropriate comments. Every buyer agent with an ounce of techie-ness should be taking Buyer Agent Photo Albums. What is that? Well, the listing agent takes photos for their sellers to put the house in one light, but the buyer agent takes photos for their clients in a more realistic light. Including shots of how far it might be from a highway, or showing bathroom water damage or a roach infested place (scroll to bottom of those listing to see the comments).

The goal is to add information, and not opinions. No "this house stinks" or "this house is great," but instead factual information like "This house backs to Rt 66" or "This house is listed at 44.6% lower than the purchase price in 2006." Information not evident in the listing agent's presentation. I wish everyone was like Loudoun agents Tony and Danilo with their Blogback blogging for feedback where they list the pros and cons of their listings and ask buyer agents to leave comments. How can you find the reviewed homes? When you do a search on FranklyMLS.com, homes with a YELLOW highlighter, those have the comments, see an example search for 1021 Clarendon.

2) 1,000 More Photos Than ALL other MLS sites.

So far, prelaunch, 10 buyer agents from 5 firms add photo albums with as many as 40 photos of 50 properties. With this, the database grows to thousands of extra photos. Consumers want PHOTOS,PHOTOS, PHOTOS and on our co-opetition website, several otherwise competing agents come together to give what the customer wants... MORE INFO and PHOTOS.

Sidenote: A year ago I bought a baseball glove from Amazon.com. It was photoless. After getting the glove, they asked if I would take a photo of it and post it on Amazon. That is what first gave me the idea for this Wiki MLS. (see post)

The site also has a point system. 1 point for comments, and 10 points for a photo album. For that, the contributor is listed underneath the listing instead of my mugshot on each listing (see above). They also get a front page link to their website. Why contact me as a buyer agent, if another agent has actually BEEN to the property, specializes in that area and has helped you get more information on it.

Buyer agents, here is a "
how to add the photo albums."

3) No branding, advertising, or logins required. Other than the required link from the site owner (me) at the bottom of each page, there is no advertising or cheesy recommended buyer agent next to each listing. Only when a buyer agent contributes to a listing with comments or a photo album, do they get a link to their site. Also, you should already have a buyer's agent by the time you hit this site.

4) ALL MLS DATA(that is legally allowed to be shown) We show everything. Including BOTH the Days on the Market-M (MLS#) and Days on the Market- P (Property). Otherwise known as DOMM and DOMP We even show you the "within the industry 'you must be nuts'" listing agent's name and number. Only 1 other site does that. Don't worry agents, there is a disclaimer that says NOT to call the listing agent and why. So why have it? Well the consumer should ultimately decide.

What we can NOT legally show is: Realtor Remarks, Compensation amount (ask your agent if they take buyer agent bribes), Owner's phone number, showing instructions and lockbox codes.

5) Not Fancy, just FAST.Except for photos of houses, there is not one graphic, icon, logo on the site. No Geewhiz, just speed. With that comes fewer features, but how many features do you see on Google or Craigslist? Just give me info fast, even if it isn't 100% accurate (as in there might be a "madison manor" in both Arlington and Baltimore). FranklyMLS.com searches by keyword only. I know that looking at 400 homes can take a ton of time. The goal was to count each click and scroll in the home buying process and cut that time down by 80%.

"Sexy?" homes? Search the Realtor Public Remarks. Try it, search for "sexy." Only a 3 of the 33 local MLS sites will let you search the Realtor Public Remarks as part of an advanced search. Some information in these remarks can't be found in any drop down or checkbox search. For example: Lake Ridge Short Sales or Arlington Metro
Keyword search for ANYTHING.One box, search anything. Including, search by ZipCodes, subdivision name, school name (if the agent put it in), street name, street number, city, brokerage name, and even by agent name (nobody does that). It takes getting used to, but it works for Google and Craigslist, dso it works for FranklyMLS.com
Spreadsheet mode. Search like the Realtor's back end system. Text only results to quickly find what you need. Also the columns show you in a quick second the List price, Original Starting price, Tax assessment and DOMp/m. (See link above)
Photos only mode. Just a page full of 50 medium sized images. For the quick glance.
Photos and Details mode with image rollover. Most sites that have this mode have useless 1 inch images. We show in this mode the 4 inch images that other sites use for their "full size." Also you can use a rollover link to see all the other 2-30 images.

6) HUGE PHOTOS. Example. All the other sites use the 4 inch photos for each listing. Probably to leave room for mortgage calculators, frames, ads etc. We instead are the only ones that pull the high res 7 inch photos as the DEFAULT. Bigger is better.

7) Cell Phone Ready. Nobody offers this... for FREE.

With the former slogan, "So easy, a cellphone could use it," the site wasn't designed for the cellphone, but it is so simple that it still works great on most cell phones. I recommend the "photo mode." This is perfect for when you are in front of a house and want to get the details. I suggest using the house # and the zipcode.

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Other interesting features:

FACEBOOK integration.We all have been asking ourselves if a useful tool for Facebook will come up. Well now there is one. You can "save" each listing into your Facebook account with 1 click. Then your friends can comment on what you have selected, or you can share them easily with loved ones.
Super Short URLS. http://franklymls.com/FA6683625 for easy copy and pasting. (Update: we just dropped the .html) into an email for others to share. I'm obsessed with "easy."
Super Short Search Strings: www.franklymls.com/default.aspx?m=R&h=ALL&s=1021+Garfield (soon this will be even shorter). You can also bookmark the search string to quickly see all listings for that search.
Find Similar Results: If you see a "more" or a ">>" click it to find similar homes or to see ALL the listings that a particular agent has (great for comparing listing agents!).
Links to similar Craigslist FSBOs, and to Zillow for previous sale data.
Link to that property on Google maps. Click on the "map" link.

So that pretty much wraps it up. I hope you have enjoy the site. I would love to get some feedback from current users (see Feedback $$ contest), local agents and others on how to improve the site.

- Written by Frank Borges LLosa-Broker/Owner FranklyRealty.com

Reviews of FranklyMLS.com, the new Wiki MLS (send me your review)

A Stroke of Genius! The Epitome of Real Estate 2.0 By Matthew Rathbun Real Estate (VAR Educator of the Year)
Broker launches 'Wiki MLS' site Inman News
Clicking with Buyers The Washington Post
Realtor Bloggers Make Headlines - Evolving Buyer Habits and FranklyMLS real/diaBlog
Great Consumer MLS Site!

My Free NVAR Adv Photo Class This Friday!

2008-03-27T03:05:00.003-04:00

Advanced photo this Friday (3-28-08) for NVAR Realtor members!

Official promo:

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PHOTOGRAPHY Shoot and Use Software Like a Pro
Friday, March 28 2008 from 10am-Noon

NVAR Herndon Center NVAR is hosting a photography workshop taught by former National Geographic published photographer, Frank Borges LLosa, whose photos have been in over 40 publications worldwide.

The workshop will cover: wide angle photography, photo correction with free software, online photo sharing, how to make a website for each home you sell, MRIS's new 30 photo system and buyer-agent photo albums. *Free to NVAR Members with one house photo or MLS Listing with photo(s).

To register please e-mail (update: email me) . Don't forget to include a recent MLS listing with your registration for class critique of your photos.

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Specifically we will cover:

Wide angle photography. Read about the amazing Kodak v570 Blog Post
Collages for your main image. See Collage Blog Post
Photo correction with free software. Consider downloading Google's Picasa.com and playing around with it before class.
Buyer Agent Photo Albums. Read this blog post and 2 minute video
Domain name per house websites like www.6210n12st.com for only $9
Online Photo Sharing. Check out my album on PicasaWeb
SUBMIT YOUR PHOTOS. Here is one of my listings with 30 photos. Submit your best listing photos and I will go over how to make them better.

Also learn how to do Panoramics:

LEARN HOW TO MAKE A COLLAGE

Advanced:

or Easy, In 30 Seconds:

I hope you can make it. We have 90 registered Realtors. EMail me if you want to be added.

Written by Frank Borges LLosa