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Good Relationships Gone Bad

No thanks… I have a _______ who’s a real estate agent. Every once in a great while, I hear these words after I offer to help someone with their real estate needs and all I can do is shake my head. Think about it, you’re going to buy or sell a house and your daughter-in-law, uncle or a best friend from high school is a real estate agent. On one hand you already know and trust the person but there could be several drawbacks.

The person you pick to represent you gets to know you very well. They learn just how much you make, how much and to whom you owe money, your credit score  and other intimate details of your life.

Another unlikely but possible drawback is the possibility that something might go wrong which could do irreparable damage to your relationship. If a detail is forgotten or something happens during the process that you perceive as being the REALTORS fault, things may never be the same.

Some time ago, I had a chance to represent a couple who were recently married and tied to me through family. They each wanted to sell a town house and then buy one big house together. Potentially a good chunk of income for me if I successfully participated in all three sales. It just wasn’t worth taking a chance, I put them in touch with another REALTOR who helped them sell their homes and buy a new one and everything was fine. If I had to do it again, I wouldn’t change a thing because of what could have happened. For some problems there is no price tag.

Tax Assessment Analysis

The tax assessment has nothing to do with the value of your home in todays market. A tax assessment is simply the value placed on a home for tax purposes. Your homes annual taxes are based on that assessment. A formula is used to arrive at the assessment and this is done every year in Northern Virginia. If someone improves a property and permits are pulled, that gets factored into the new assessment. An assessment could be wrong if someone finishes a basement themselves or builds an addition that permits weren’t pulled for.

I trust in and use the Tax Assessment Analysis to back up my “normal” CMA and it helps me with my price opinion of a home. I have years of experience with this type of analysis in Virginia and in Maryland. This approach has it’s skeptics and there are even experienced real estate agents that have a hard time understanding the value of this type of analysis. Some people focus on things like “that assessment is wrong because it has a deck” or “an assessment has nothing to do with value”. They don’t take into account the law of averages. Some are assessed high and some low. If you throw out 1 or 2 highs and the same amount of lows, the averages usually work out the same.

Tax assessments have nothing to do with value. That being said, a tax assessment IS relative to a home. In any given subdivision, one can compare the tax assessment to the list prices and sales prices to find out the difference as a ratio. When I started in real estate, older agents would say, “value is 120% of assessment” and they meant across the board. All subdivisions and areas are different and they will have different ratios but within the same subdivision, I find, the ratios are VERY similar. As an example, lets take a $630,000 home whose tax assessment is $592,560. By dividing the 630K by the assessment, you get 1.0631834750911300121506682867558 or 106%. If this was the average for several homes that went to settlement in the past 3 or 4 months, you could apply that average to your own homes tax assessment to come up with a likely sales price. For example, your homes assessment of $569,980 X 106% = $604,178.80

Another aspect to this analysis is your data source. For the traditional CMA one has to compare like properties. Since the assessment is relative to the home, you’re able to compare Ramblers, Split Levels, Split Foyers and Colonials. A Ramblers assessment and list price will be lower than a Colonials but the average ratios will be similar. I enjoy looking at the data from many angles. I compare:

• List price to the assessment
• Sales price to the assessment
• The lowest and highest ratios to develop a range
• The sales price ratio after seller concessions
• The ratio timeline increase or decrease

These are the minimum I consider when trying to find the “right price”. In my experience, the analysis fails when the home has either just a few unique or no comps or when the subject property has an incorrect tax assessment. It has always been one of my favorite tools as a real estate agent and works to back up my regular CMA in most subdivisions.

Should I Become a Real Estate Agent?

Many people try to picture themselves in a real estate career. People who go through the process of buying and selling a home as well as people in other industries. I love my career choice and I can’t imagine myself doing anything else for a living, except for maybe owning and operating a Martial Arts school  : )

Being a REALTOR can be very rewarding and not just financially. One also has a tremendous sense of accomplishment when you help someone reach the goal of home ownership or help someone transition from one house to another or successfully relocate into or out of the area. The job has so many things on the plus side and really, only a couple of things on the minus side, if you’re a pros and cons type of decision maker.

Pro’s

• Real Estate is a very professional occupation, primarily filled with intelligent, ethical, business people. I think of real estate as requiring the same level of knowledge and commitment as any other specialized field. We are sales people but not typical sales people. We are not selling a product, we are selling our skill set. We wear many hats.
  • That of an educator, walking our clients through the home buying/selling process.
  • That of a trusted adviser, using our knowledge and experience to protect the safety of our clients wishes
  • That of an experienced negotiator, to help secure the best price, terms and conditions for our client
    and of course…
  •  the hat of a marketing specialist for the promotion of property and self
  • Using this skill set helps differentiate us from what is normally thought of as a sales person. OK… THAT was alot of sub bullets  ; )
• Your work is always different and you’ll continuously meet and help new people
• You set your own schedule and you are completely autonomous if you wish to be. It’s nice being the boss with a completely trustworthy staff.
• There’s no salary cap, with effort and discipline, you can make as much as you want to.

Cons

• There’s no bi-weekly paycheck, you only get paid when you successfully go to settlement.
• You will spend lots of, both money and time, with no income, doing the things that hopefully, should lead up to the settlements you require.
• You have to be a pro-active person and prospect. Prospecting is doing things you’re supposed to do to meet people and help them buy or sell real estate.
• The hardest part of the job, in my opinion, is meeting new people who want to buy and sell real estate. Once I meet them, we tend to bond instantly and everything is very comfortable.

They say that teachers and nurses can do well in real estate but there are many great agents who came from other professions. To be a Realtor you have to be of good character without a record. You have to complete 60 hours of training to prepare you to pass a national test. You also have to take and pass a state test. You have to meet the minimum hours of continuing education to maintain your license, most of us do that and more anyway. You’ll have to join your States Real Estate board and the Multiple Listing Service. There are many other organizations you’ll need to join and dues you have to pay The office you join will walk you through the steps. You can go it alone or hook up with a larger team to get your feet wet. You can start part time or throw caution to the wind and go for it full time. The best way to learn more is to meet with a career counselor at a real estate office of your choosing. Meet with a couple of offices or Brokers and make sure you “feel” good about being there and that the office or Broker meets your needs and/or offers you what you think you’ll need. Everybody’s different and every situation is unique but for me, I feel VERY lucky to have made the decision in 1994 to become a real estate agent and if I could go back in time, I’d do the same thing again. What is the best motivation for success? The need to support your lifestyle and more importantly, your family. If you have to make it work, you will. You’ll do the things neccesary to become successful. Open houses, cold calling people, farming and investing in internet leads (my personal favorite).

If you’re considering a career in real estate, give me a call or contact me. I would be more than happy to answer your questions and even put you in touch with a career counselor that I know and trust.

Children’s Miracle Network Hospitals

Locally, about 400 RE/MAX Allegiance associates, including myself, contribute a portion of our income to the Children’s Miracle Network Hospitals to help our local area. Additionally, RE/MAX International has thousands more RE/MAX associates contributing to the larger effort. Through our collective strength, we’ve been able to raise millions and millions of dollars over the years. I’m proud to be able to participate.

Dear Roy Kohn,

Thank you for participating in the Miracle Home program and pledging to make a donation to help kids through Children’s Miracle Network Hospitals. Your contributions will make a difference in the lives of children and nothing could be more important.

Here’s an example of what RE/MAX contributions to Children’s Miracle Network stood for last year.
• 859 Repaired Hearts. Repairing a heart valve in a child averages $65,000.
• 3,493 Brain MRIs. An MRI of the brain and brainstem to find tumors and other abnormalities costs $16,000.
• 250 Bone Marrow Transplants. A bone marrow transplant to treat sickle cell anemia or leukemia averages $223,000.
• 745 Lives Without Cancer. The average treatment for a child with cancer costs $75,000.
• 1,363 ICU Beds. These state of the art beds cost $41,000. A well-equipped Neonatal Intensive Care Unit needs 15-20 beds.

Your office is helping kids at the Children’s Miracle Network hospital in your area and nothing could be more important.

With Gratitude,
Children’s Miracle Network

Buying or Selling a Home? Why Take Chances!

 Below is the most recent RE/MAX television commercial. It’s one of the perks of being with a successful Broker. The commercial is for a national audience that isn’t experiencing the fantastic market that Northern Virginia is lucky enough to have. When most local Brokers are cutting budgets and laying people off, I feel fortunate to be with a Broker with sucess and vision.

The Real Powerhouse in Burke Home Sales

I’m very proud to have finally moved to RE/MAX Allegiance, one of the top two largest RE/MAX franchises in the world. I have been thinking about this move off and on for my entire career. It’s what many of us aspire to do but my hands were tied for a decade as I was also a salaried employee with my former Broker. Recently though everything lined up just right and I made the switch. Now I have my first listing with RE/MAX and another on the way. As a buyers agent, I also have several offers out there and one ratified contract. Tomorrow makes one week and it’s like I never skipped  a beat. I instantly feel like I’ve always worked with this wonderful Brokerage.

 

Burke, Virginia Real Estate Brokers – The Top Three (as of (3/31/09)

Burke, VA-Brokers	RE/MAX Allegiance	Long & Foster	Weichert
Active Listings	79	69	42
All Under Contract	72	69	51
Sales	73	58	48
Listings Sold	60	48	26

 

Information provided through an MRIS search using the Broker code.

What’s an Earnest Money Deposit?

The earnest money deposit is not your down payment but when you complete the purchase of your new home, the money is applied towards your down payment or cosing costs. A deposit is required with the submission of an offer. The amount of the deposit isn’t set and is negotiable.

During the process of writing the offer, one of the things you’ll need to decide is how large a deposit you’d like to make. You want the deposit to be large enough to get the sellers attention. If your offer included a $100 EMD check, the seller would not take it seriously. If you have to compete for a house, a larger deposit may impress a seller enough so they will accept your offer instead of someone else’s, even if your competition is offering the same price or slightly more.

What amount is required? There is no rule of thumb but I’ll give a couple of recent transaction examples. On a sale of about $300,000 people have written checks for $1,500 – $4,000. On a sale of $700K-$800K the checks have been $7,000 to $15,000. I once had a buyer write a $27,000 check on a $600,000 home because he wanted to make sure his offer was noticed. He did win in competition for that house.

Several contingencies may need to be removed before your money is truly at risk and your agent should make you aware of those deadlines. Contingencies may include:

• Financing
• Appraisal
• Home Owners Association or Condominium Document Review
• Home Inspection
• and possibly more

Before the contigencies are removed, you can ask for things to be repaired or decide not to buy the home and get your deposit back. Once the contingencies are removed you’ll be more confidant in the home you’ve chosen. When you go to settlement, your earnest money deposit is given back to you in the form of a credit or a check.

Alexandria Mt Vernon Home Sale Success

Over the past four months, we’ve had the pleasure of working with Roy to find a home for our family. We had seen first hand how pushy some realtors can be, but we were pleasantly surprised by Roy’s willingness to do everything he can to make our experience comfortable. As first time home buyers, we were not in a hurry to buy just any house, so we took our time, and Roy did not mind at all.
I had special requests and circumstances because my in-laws were going to live with us. Roy understood our concerns and went out of his way to make sure we found the right home for us.
Roy’s kindness, openness, and honesty assured us that we had chosen the right person to help us make the biggest decision we’ve made since our marriage.

When we finally settled on a house, Roy spent hours there making sure everything was functioning correctly and that we would be getting the best deal possible. When our families came to visit the house, they all mentioned how nice Roy was to them and how he made them feel so comfortable.

Roy– we really appreciate your time and effort in helping us navigate the often complex house buying process. You made our visits enjoyable, and gave us the freedom to think about our choice for as long as we wanted. Our indecisiveness did not frustrate you, and your patience helped us get through the last four months.

Thank you again for everything, and we look forward to having you over in our new home!

Warm regards,
Tuqa & Ahmed

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

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