February 2009

Crofton Home Sale Success

We want to thank you for the excellent service provided to us in finding a property that met our needs, our expectations and our budget. For you, providing this type of excellent service is something that you do every day; it is part of your work ethic and an enjoyable part of your job. But our situation was nothing run-of-the-mill or ordinary! Yet you made it all seem so effortless. Our situation was that we were temporarily residing in Warsaw, Poland on a State Department assignment and wanted to find a property for our son to live in while he is in college in Maryland. Neither my husband nor I were going to be able to actually view the property until it came time for closing, if even then! We wanted the property to be in an area we were familiar with, which was convenient to our son’s college and work locations, and met our investment value criteria. The property had to be not too small and not too big – as a young adult with school and work obligations would be the primary resident, and we didn’t want the property to become the nesting grounds for all of his friends. It had to be just right. Sounds like a familiar children’s story, doesn’t it?We received your name through a mortgage broker recommended by a close family friend whose advice and recommendation we hold in very high esteem. You met every expectation we had based upon that recommendation. The task of finding the “just right” property for us was, however, not uncomplicated by trying to obtain and provide information timely from such a long distance. But you rose to the challenge and overcame the extreme distance between us by making liberal use of technology in the form of sending and receiving scanned documents via email, working with our son and close friend to schedule convenient viewings of the properties, and by being a true advocate for us by advising them and us on the pros and cons of each property. You also made and took many phone calls at odd hours to keep us informed all along the way.
Additionally you were an integral part of the price negotiating process for the property we eventually selected. You provided expert advice and explained, in layman’s terms, why one price offer option was better than the other, and through consultations with the mortgage broker, were able to help us understand how each negotiated price would affect the amount of our mortgage. In the end, this resulted in the seller agreeing to our offer and in us successfully purchasing the property we wanted.

Finally, your endearing personality, second only to your vast experience as a realtor, made it an absolute pleasure to work with you. You provided expert advice in a congenial and understandable manner that made it easy for us to have complete trust in you – a very important aspect of working with any realtor, but especially notable given that we didn’t have the opportunity to meet you face to face during this entire process.

Sincerest thanks,
Jan and Susan

How Much Money Do Real Estate Agents Make

Real estate agents don’t always get paid for our efforts. Sometimes by choice and sometimes by chance, we work without pay. We offer many free services as a way of “getting our foot in the door” and if a comfortable connection occurs, we can establish a relationship that could lead to a successful settlement on a home purchase. We work very hard with the hope that we get paid for our efforts. I help people achieve the goal of home ownership. Often I’m the problem solver when no solution seems possible. My job offers great rewards, not just financial ones. I know just how lucky I am to enjoy my work the way I do. I owe my successes to all of the wonderful people and families that have trusted in me.

When a REALTOR lists a house for sale, the agent and the home owner have already agreed to an amount (usually a percentage) of the sales price, that will take care of paying for the sale. The listing agent and the homeowner also decide how much of that total commission, will be shared with the selling agent (buyers agent) who brings the buyer.

Real estate commissions are completely negotiable. I’ve heard of them being as low as 4.5% and as high as 8%. Mine have historically been between 5% and 7% depending on several factors. Let’s just take my average of 6% as an example. If I list a house for $400,000 and charge a 6% commission, that’s a $24,000 commission. We’re going to offer the agent who brings the buyer half, which is$12,000 which they have to split with their Broker. What do I mean, split with the Broker?

The commission to sell a house is split, usually four ways. If a buyer buys a home directly from the listing agent the seller still pays the same amount of commission, it’s just that the agent and the Broker will get twice as much. The listing agent and the home owner negotiate the commission. The listing agent offers an amount to any other agent and Broker who brings a buyer, usually half. So that’s two sides… the listing side and the selling side. The listing agent has to split their commission with their Broker and the selling side has to do the same. So of the total $24,000 of commission charged, each side usually sees about a $6,000 check. After an estimated tax payment it’s in the mid $3,000′s per transaction. To stay in business REALTORS spend many thousands of dollars each year to maintain their licensure and for advertising and promotion.

Most good real estate agents make normal incomes. There are some of us that make a lot of money, into the 7 figures and there are some who may never sell a home.  Real estate has a high turn over rate for the newly licensed. The majority of us career REALTORS are right in the middle. Nationally the average income for a real estate agent is $33,000. I’m certain that in the DC area the average income is higher. Agents in our area, I feel, make close to or into the 6 figures, which allows us (along with our wives or husbands incomes) to make our mortgage payments, car payments and other bills and if we’re lucky, to save and invest a little. The income stream seems pretty wide but it’s all relative. Perception varies and it depends on what you’re accustomed to. The money we earn is gross income with no consideration for taxes, insurance, retirement, health care, life insurance, real estate insurances, real estate dues, MLS fees, continuing education costs, voice mail, sign fees, and a dozen other costs involved with being a REALTOR. The hard part for a REALTOR is the impossibility of a budget. We don’t get a fixed amount every single month. We can have good months and bad months. Sometimes we have bad months for many months. Not only do we work free for buyers and sellers until we sell the listing or find the “right” home for a buyer and then go to settlement but we also spend money in hopes of that eventual settlement. There are many times we spend hours and hours with buyers and sellers without pay and the settlement never occurs.

I was online recently (within the year) and saw a worksheet on how to negotiate with a realtor for time spent doing things V.S. cost so you could negotiate with the agent. Kind of like, the worth of an agent. I was dumbfounded by the naivete of the person putting that out there. A 100% commission based person is completely different than any other industry. If such a worksheet was adhered to, we would only be paid fairly for the time spent with an actual buyer or seller. All REALTORS would have to quit and seek other employment because of the hundreds and hundreds of unpaid hours spent prospecting, advertising and working with non-performing buyers and sellers. All REALTORS in this scenario would be brand new agents with no experience and buyers and sellers would suffer great financial loss working with these inexperienced agents who would be on their way to unemployment.

Ok, watch me hurt myself as I hop down off of my soap box. I am VERY lucky. I love what I do and I manage to meet and form relationships with enough new people every year that I can pay the bills. I want to reach that next level so that I have a more comfortable future for my family. I wouldn’t do anything else!

What is an Absorption Rate?

The rate at which homes are selling is called the absorption rate, in other words, how many months of inventory  would we have if no more homes were listed for sale. If 3 homes each month are selling and there are 9 homes currently listed, we have a 3 month absorption rate. The Market Absorption rate does NOT mean how many days on market or how long a home takes to sell. Days on market varies depending on the type of home, condition and location. The Absorption Rate tells us whether we’re in a buyer’s, normal or seller’s market. Knowing this can help us adjust our marketing strategy.

The Market Absorption Scale below shows the type of market we’re in given the current supply of homes (absorption rate). This helps you determine the type of market we’re in and how it affects you.

Seller’s Market – In a seller’s market there is less than 5 months’ supply of homes. Since there are fewer homes to choose from, sellers are in control and buyers have to be willing to pay top dollar to get the house they want. Multiple offers are often the norm in a seller’s market.

Normal Market – In a normal market there is a 5-6 month supply of homes. A normal market has a balanced level of inventory where the market is not leaning in either the seller’s or the buyer’s favor.

Buyer’s Market – In a buyer’s market there is more than 6 months’ supply of houses. Buyers are in control since there are so many homes from which to choose. Sellers often have to give an incentive (pay for repairs or closing costs or take a less than full price offer) to buyers to buy their house.

Kingstowne Home Sale Success

 

“While everyone thinks buying a house can be stressful, that was not the case for us. Roy actually made it an ENJOYABLE experience – imagine that! So much that, even though we are settled comfortable in our new house, we miss our outings with Roy!
Roy’s knowledge of the market, while providing patient reassurance is a welcome change in the real estate industry. Throughout the entire process we knew he was truly committed to helping us find the “right” house, rather then getting us “into” a house. His dedication to service while providing warm hospitality made all of our appointments with Roy fun and something to look forward to. Roy stands out as a gem in the sea of real estate agents for the Northern Virginia area.”
Thank you Roy – we look forward to working with you again and referring you to our friends, family and colleagues! We’ll be sure to send pictures after we have the baby!

Kelly and Chris

Burkefield, Virginia

OK, there is no Burkefield, it’s West Springfield. The Springfield area is dominated by the interchange of I-95, I-395, and the Capital Beltway (I-495), known as the Springfield Interchange or Mixing Bowl. The center of the town is at the intersection of Route 644 (Old Keene Mill Road / Franconia Road) and Route 617 (Backlick Road) adjacent to the interchange. A significant commercial district exists around the interchange area, but the rest of the community is primarily residential in character.

Springfield has four primary ZIP codes:
22150 (unofficially referred to as “Central Springfield”)
22151 (“North Springfield”)
22152 (“West Springfield”)
22153 (Also “West Springfield”) Wikipedia refers to it as “Burkefield” due to its proximity to Burke, Virginia.

West Springfield is a fantastic area for so many reasons, not the least of which is that I live here with my family. It’s larger than just the Western side of Springfield, Virginia, it’s where Springfield, Burke and Fairfax Station meet. I live in Orange Hunt Estates in West Springfield and can walk or bicycle to the South Run Rec Center and Burke Lake. It’s a matter of minutes to drive to gas, restaurants or shopping. Our kids go to school here so as parents we think that the schools are fantastic which, of course has nothing to do with my wife being a teacher in the Fairfax County Public School system ; ) When you consider places to live, you should really take a look at West Springfield.

Mount Vernon Alexandria Home Sale Success

 

We continue to be very pleased with our new home and the quality customer service you provided every step of the way during the search and closing processes.Having arrived in the area after a lengthy period overseas with very outdated information of the DC metro area market, your no-pressure, friendly personality and detailed knowledge of the area’s fluid real estate market were very reassuring to us. You went out of your way to ensure that we understood each step of the process, allaying our fears and dispelling misconceptions which put us both at ease.

We were impressed with your ability to take our requirements and turn them into viable options. Your selections gave us locations and suggestions that we had not thought of before. It was very convenient to review your suggested selections on-line before we saw the homes.

You went out of your way to work with both the for sale by owner and us in order to get the best deal for all parties. Ultimately, we always knew that you were our agent and our confidence and trust in you was well earned. Your continued reassurances and quick response to every one of our concerns was very helpful.

Roy, you did an outstanding job in getting us this home and we will certainly recommend you to others would want to buy or sell a home. Your continued follow-through and support are most appreciated. Many thanks for all that you accomplished on our behalf.

Sincerely,
Jack and Rosemary