The Multiple Listing Service, AKA "MLS". Is it good? Is it evil? Is it a "monopoly"? Just what is going on here?
In short, the objection to the MLS is "The public does not have FULL access to the system." Of course, much of the data IS easily available. For spokane, go to MyCountryHomes.com and you can search properties there. Realtor.com, Trulia.com, Yahoo.com and hundreds of other sites also provide significant access to MLS information around the US. But, the commenters were correct, John Q does not have the same access as do MEMBER Realtors.
The other major point of objection was the exclusion of For Sale By Owner (FSBO) properties from the MLS and most other sites tapping into the MLS and the lack of listed properties on the FSBO sites.
The net result was to search any neighborhood, there was no central clearing house where all the data could be perused at one time. Several non-realtor bloggers felt this "monopoly" was wrong. Here is where I stand!
I pay about $50.00 a month plus one time fees, lockbox fees etc etc etc as does every other Realtor in town to support the collection, compilation and maintenance of this data. Additionally, each Realtor pays their office a split of every commission much of which goes to support the people who manage the data and provide it to the MLS for input into the system. Folks, creating and maintaining this system is very expensive. It is unrealistic to expect people who pay for and work on this system to give the information away.
Because most realtors in any area are MLS members, any buyer can see any home that is available with one point of contact! This is a huge benefit.
What does the MLS do for you? It pulls together a huge amount of information, sales, listings, expired listings, property histories, property data and historical data. It let's your Realtor quickly figure out the likely value of the home you want to sell or the home you want to buy. Also, it puts the majority of homes for sale in any area into one bucket. While it does not include FSBO's, recent evolution of the system has permitted "flat rate listings" where the FSBO pays a realtor to list his property in the MLS. One complaint about this was the FSBOs were "required to pay a compensating broker commission" (CBC). I am going to talk about that at greater length in "Show Me the Money" but for now, I will leave it to the reality of "If they do not pay a fair, competitive CBC, they probably won't get much cooperation from realtors because no one wants to work for nothing!
The MLS is responsible for the data that populates virtually all the real estate sites people look at that involve listed properties. Realtor.com is paid for from the dues realtors pay and loads MLS data every 24 hours. Yahoo.com, Trulia.com and many other sites also draw directly from MLS input. These sites are free to the public and let you search in significant detail. I still recall looking for Spokane property while I was in Thailand and the internet real estate venues were in their infancy or even perhaps the mothers were still in a state of pregnancy. I much prefer the current system.
IF you work with an agent, you will have access to all the detail available. The solds, the actives, the listing history of any property, huge data pertinent to that property and the sales history for any area that interests you. You do have to pay to play, but, that pay is usually wrapped into the sales cost of the house.
What is the biggest effect of the MLS? I think it has evened the market out significantly. Believe me, waiting for that unsuspecting Californian with a lot of money to come and pay you three times what your home is worth is just not going to happen. The MLS and associated sites on line make determining asking value very easy. If you are working with a member agent, you can access the solds with the same ease.
In the end, the MLS resulted in a market where you do not get massively ripped off because you do not know the market and you can not get rich quick by finding someone who does not know the market.
Monopoly? No. (2000 realtors to choose from with all kinds of business models in my area). Beneficial? Absolutely. Call your realtor today for quick access!
Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
Saturday, November 22, 2008
Saturday, October 25, 2008
Do FSBO'S pop or fizzle?
FSBO = For Sale By Owner. Does it make cents to sell your home yourself? Maybe, maybe not. Certainly the motivation is money. While there is no set percentage rate and there are as many potential plans as there are people, the Agent commission is one of the largest costs of a sale. For the purpose of this blog, let's say the commission is six percent. That is $12,000. on a $200,000. house. We could all do a lot with that much money. So, let's look at some general statements or consistent ideas about FSBO's and the pros and the cons of this route.
I hear sellers say, "I am going to FSBO it and keep the agent commission for myself." I hear buyer's say "I am going to buy a FSBO and knock all the commission off and get the house for $12,000. less than market." Which is correct? Either or a hybrid could be true. I have observed some FSBO's to be incredibly under priced. I have seen many more to be very much overpriced. In the end, it will come down to a negotiation and that will determine who benefits.
If you decide to sell your home by yourself, what are some of the problems. First is access to buyers. In most markets, 85 percent or more of the buyers are associated with an agent. A buyer, in our example, is a $6000.00 business asset to the agent. If you are not willing to cooperate with the agent, why should he release his buyer to you? He has spent hours, if not months; many thousands of dollars becoming educated regarding the practices, principals and quirks of the local real estate market. He has likely spent much time driving that buyer around showing him property. For the FSBO to expect the Agent to say, "Here is my buyer, have a nice life" is the same as for you to walk into the hardware store and say "Gee, this is a nice hammer. I appreciate it. See you later." Then leave without paying. Second. How familiar are you with local real estate law? Two obvious questions that are often missed by sellers acting on their own behalf are the Lead Based Paint addendum for 1978 and older homes and the Property Disclosure Form which is required in many states. Failure to use either could result in legal problems or fines. Third. Selling or buying a home is very emotional for most people. Agents earn their money by being the Emotional Dead Zone where the heat can dissipate without damage to either party--at least in theory. Sometimes, you are just too close to the situation to be rational. An agent may keep it together for you in these circumstances. Fourth, how do you price your home? How do you know how high or low it should be? Are you pricing your home too high so it will not sell? Are you pricing it too low? If so, you may be giving away the commission and assuming the work and stress of the sale yourself. Does that make sense? And finally, costs. The agent generally spends a lot of money advertising your property. You are going to assume that bill. Also, the Multiple Listing Service (MLS) gives you access to Realtor.com and all the local agents. This tool is the single biggest benefit to a seller. Without listing your home with a Realtor, you lose this benefit. Your house becomes much less visible. Visibility sells. That, after-all is your target.
What is the benefit of being a FSBO? You MIGHT keep a few more dollars in your pocket. Obviously in the hot, hot, hot markets where nothing is available, being a FSBO may make sense. Also, if there is just no money to pay those costs, it might make sense. In any case, it is probably worth your time and money to buy and hour or two of an Agent's time to get your home priced, find out what forms are necessary and get a general state of the market. A good agent may charge you $100-200 an hour. It is usually money well spent. Certainly, it makes sense to enlist the aid of the buyer's agents by paying a buyer's agent commission of half or slightly more of the typical commission in your area. Remember, it is not legal to set industry commission rates. Rates are always negotiable. That does not mean an agent has an obligation to accept your offer. What is reasonable to you may not be to the agent. So, in our example. Pay the buyer's agent 3 - 4 percent. He is doing the work of both agents because he has to deal with your emotions as well as his buyers' stress. Believe me, he earns his money.
In the end, 85 percent or more of FSBOs list their property. Personally, I am not offended by FSBOs. I have sold many of their homes, I have helped many more with forms, information and photos. After-all, many ultimately become my listing or I help the seller buy their next home. I built a 2000+ sq foot barn. Took me 7 years to do it. The front is 49.5 feet, the back is 50.2 ft. Sheet rock does not come together just perfectly at the corners. But, it works. I wanted to do it myself, I did it, I am happy with it, but, I will never build another myself. Do you really want to sell your home yourself?
PS: Do It Yourself Apendectomy kits available from MedicalSuppliesAreUs.com
I hear sellers say, "I am going to FSBO it and keep the agent commission for myself." I hear buyer's say "I am going to buy a FSBO and knock all the commission off and get the house for $12,000. less than market." Which is correct? Either or a hybrid could be true. I have observed some FSBO's to be incredibly under priced. I have seen many more to be very much overpriced. In the end, it will come down to a negotiation and that will determine who benefits.
If you decide to sell your home by yourself, what are some of the problems. First is access to buyers. In most markets, 85 percent or more of the buyers are associated with an agent. A buyer, in our example, is a $6000.00 business asset to the agent. If you are not willing to cooperate with the agent, why should he release his buyer to you? He has spent hours, if not months; many thousands of dollars becoming educated regarding the practices, principals and quirks of the local real estate market. He has likely spent much time driving that buyer around showing him property. For the FSBO to expect the Agent to say, "Here is my buyer, have a nice life" is the same as for you to walk into the hardware store and say "Gee, this is a nice hammer. I appreciate it. See you later." Then leave without paying. Second. How familiar are you with local real estate law? Two obvious questions that are often missed by sellers acting on their own behalf are the Lead Based Paint addendum for 1978 and older homes and the Property Disclosure Form which is required in many states. Failure to use either could result in legal problems or fines. Third. Selling or buying a home is very emotional for most people. Agents earn their money by being the Emotional Dead Zone where the heat can dissipate without damage to either party--at least in theory. Sometimes, you are just too close to the situation to be rational. An agent may keep it together for you in these circumstances. Fourth, how do you price your home? How do you know how high or low it should be? Are you pricing your home too high so it will not sell? Are you pricing it too low? If so, you may be giving away the commission and assuming the work and stress of the sale yourself. Does that make sense? And finally, costs. The agent generally spends a lot of money advertising your property. You are going to assume that bill. Also, the Multiple Listing Service (MLS) gives you access to Realtor.com and all the local agents. This tool is the single biggest benefit to a seller. Without listing your home with a Realtor, you lose this benefit. Your house becomes much less visible. Visibility sells. That, after-all is your target.
What is the benefit of being a FSBO? You MIGHT keep a few more dollars in your pocket. Obviously in the hot, hot, hot markets where nothing is available, being a FSBO may make sense. Also, if there is just no money to pay those costs, it might make sense. In any case, it is probably worth your time and money to buy and hour or two of an Agent's time to get your home priced, find out what forms are necessary and get a general state of the market. A good agent may charge you $100-200 an hour. It is usually money well spent. Certainly, it makes sense to enlist the aid of the buyer's agents by paying a buyer's agent commission of half or slightly more of the typical commission in your area. Remember, it is not legal to set industry commission rates. Rates are always negotiable. That does not mean an agent has an obligation to accept your offer. What is reasonable to you may not be to the agent. So, in our example. Pay the buyer's agent 3 - 4 percent. He is doing the work of both agents because he has to deal with your emotions as well as his buyers' stress. Believe me, he earns his money.
In the end, 85 percent or more of FSBOs list their property. Personally, I am not offended by FSBOs. I have sold many of their homes, I have helped many more with forms, information and photos. After-all, many ultimately become my listing or I help the seller buy their next home. I built a 2000+ sq foot barn. Took me 7 years to do it. The front is 49.5 feet, the back is 50.2 ft. Sheet rock does not come together just perfectly at the corners. But, it works. I wanted to do it myself, I did it, I am happy with it, but, I will never build another myself. Do you really want to sell your home yourself?
PS: Do It Yourself Apendectomy kits available from MedicalSuppliesAreUs.com
Monday, October 20, 2008
Has the real estate market turned into nacho cheese?
Day after day, I listen to the media bemoan the high numbers of homes being repossessed. As a Realtor, I know first hand we are in a tough market. So, it has been with some surprise I have found the repo market is not what the national media is saying it is. Not in Spokane, at any rate.
I know there are repos out there. I see an occasional repo when showing homes. I have friends who have listed a number of them over the past several months. Sadly, I have friends and acquaintances who are losing their homes or hanging on by their fingernails. Repos have not been a significant factor in my business, but I began paying closer attention because several long-term clients indicated they were ready to invest if I could find a screaming deal. Repos are a good place to start looking.
In recent years, most lenders have listed their repos with Realtors in order to get free advertising and to expand the market for their "used goods." I felt I could get the numbers together easily and that there must be hundreds of choices. So, where is our market here in eastern Washington?
To give you a yardstick, in May 2007, there were about three thousand homes listed in the Spokane area. The market was hot and multiple offers were common. Now, houses sit for months. Values have dropped 10-20 percent and in homes costing over half a million dollars, probably more. Currently, in the Spokane Multiple Listing Service (MLS,) there are 5,818 residential properties for sale. Of these, 603 are "pending," which means they are under contract and quickly (hopefully) moving towards closing. Another 310 are "contingent" waiting on inspection, sale of another home or some miscellaneous issue to come to pass. Clearly, we have a problem when our inventory has almost doubled in 18 months and new construction has almost stopped.
The burning question is, "How badly have we been hit by the repo plague?" Of almost six thousand active listings, only 112 are repos. HUD, a rare non-MLS user, has only three listed in Spokane County and one in the adjacent Stevens County. This is certainly not an epidemic. It is not significantly worse than in previous years and on a percentage basis, I would hazard a guess, far less. It seems to me, 12 years ago when I first moved here, there were far more repos and far fewer homes for sale. Also the cost of getting into the homes and making the payments was much, much less then.
What does this mean? I think, it tells us our Inland Empire real estate market is still strong. I believe it shows the majority of people are working hard to save their largest investment. I think it also tells us in this area our industry, both the lenders and the Realtors, have not been the scalawags the media has portrayed them to be. Finally, I truly believe this demonstrates the flexible programs we used to help people buy their homes were often not so bad after all.
My lender and I had a radio show for about a year. We often discussed some very creative lending programs, some we liked and some we did not, but, we noticed all were appropriate for some users, none were good for everyone. In the end, if we as real estate professionals work carefully with our lenders to put the right people in the right programs and keep our clients' well-being, not the transaction at hand, in the front of our faces, we will have a limited number of failures. That is ultimately our duty -- to take good care of our clients.
I know there are repos out there. I see an occasional repo when showing homes. I have friends who have listed a number of them over the past several months. Sadly, I have friends and acquaintances who are losing their homes or hanging on by their fingernails. Repos have not been a significant factor in my business, but I began paying closer attention because several long-term clients indicated they were ready to invest if I could find a screaming deal. Repos are a good place to start looking.
In recent years, most lenders have listed their repos with Realtors in order to get free advertising and to expand the market for their "used goods." I felt I could get the numbers together easily and that there must be hundreds of choices. So, where is our market here in eastern Washington?
To give you a yardstick, in May 2007, there were about three thousand homes listed in the Spokane area. The market was hot and multiple offers were common. Now, houses sit for months. Values have dropped 10-20 percent and in homes costing over half a million dollars, probably more. Currently, in the Spokane Multiple Listing Service (MLS,) there are 5,818 residential properties for sale. Of these, 603 are "pending," which means they are under contract and quickly (hopefully) moving towards closing. Another 310 are "contingent" waiting on inspection, sale of another home or some miscellaneous issue to come to pass. Clearly, we have a problem when our inventory has almost doubled in 18 months and new construction has almost stopped.
The burning question is, "How badly have we been hit by the repo plague?" Of almost six thousand active listings, only 112 are repos. HUD, a rare non-MLS user, has only three listed in Spokane County and one in the adjacent Stevens County. This is certainly not an epidemic. It is not significantly worse than in previous years and on a percentage basis, I would hazard a guess, far less. It seems to me, 12 years ago when I first moved here, there were far more repos and far fewer homes for sale. Also the cost of getting into the homes and making the payments was much, much less then.
What does this mean? I think, it tells us our Inland Empire real estate market is still strong. I believe it shows the majority of people are working hard to save their largest investment. I think it also tells us in this area our industry, both the lenders and the Realtors, have not been the scalawags the media has portrayed them to be. Finally, I truly believe this demonstrates the flexible programs we used to help people buy their homes were often not so bad after all.
My lender and I had a radio show for about a year. We often discussed some very creative lending programs, some we liked and some we did not, but, we noticed all were appropriate for some users, none were good for everyone. In the end, if we as real estate professionals work carefully with our lenders to put the right people in the right programs and keep our clients' well-being, not the transaction at hand, in the front of our faces, we will have a limited number of failures. That is ultimately our duty -- to take good care of our clients.
Friday, October 17, 2008
Why "Verities & Balderdash?"
Those who know me, know I know a little about a lot, a lot about a little, and have a mind that retains nonsense more effectively than my body maintains carbohydrates. Also, I can sing along with about 90 percent of the Harry Chapin songs. His most popular album was titled the same as my blog and I cheerfully admit to purloining his title! According to Dictionary.com Unabridged (v1.1) Verities means:
1. the state or quality of being true; accordance with fact or reality: to question the verity of a statement.
2. something that is true, as a principle, belief, idea, or statement: the eternal verities.
According to quite a number of authority figures in my long life, "Balderdash!" was the one word definition of some of my wilder ideas. Think about the scene in Forrest Gump in which Lt. Dan's ancestors are killed through a series of wars. Just replace the dying ancestors with my grandparents, parents, teachers, pastors, sergeants, commanders, bosses and wife sternly staring at me as a baby, young boy, little older boy, teenager, young college pup, draftee, up to a grown man, with each level saying "Balderdash!"
So, in this blog, you will get to know me through my verities and my balderdashes as they come to mind and I have time to commit them to this forum. Hang on! It could be a wild ride!
Here are some of the subjects we may discuss: Real Estate, because that is my current profession. Gardening, because it is one of my passions (Check out MyCountryHomes.com, the daylilies tab at the top right to access pictures of my garden. Peonies, Iris and 200+ varieties of daylilies! ), politics, religion from time to time, places foreign, books and just plain old stories.
I look forward to lots of conversation.
Before I say "Goodby," I want to compensate Harry for the theft of his title by encouraging you to check out Harry's daughter, Jen. She makes some very nice music. Her site is:
http://www.jenchapin.com/
1. the state or quality of being true; accordance with fact or reality: to question the verity of a statement.
2. something that is true, as a principle, belief, idea, or statement: the eternal verities.
According to quite a number of authority figures in my long life, "Balderdash!" was the one word definition of some of my wilder ideas. Think about the scene in Forrest Gump in which Lt. Dan's ancestors are killed through a series of wars. Just replace the dying ancestors with my grandparents, parents, teachers, pastors, sergeants, commanders, bosses and wife sternly staring at me as a baby, young boy, little older boy, teenager, young college pup, draftee, up to a grown man, with each level saying "Balderdash!"
So, in this blog, you will get to know me through my verities and my balderdashes as they come to mind and I have time to commit them to this forum. Hang on! It could be a wild ride!
Here are some of the subjects we may discuss: Real Estate, because that is my current profession. Gardening, because it is one of my passions (Check out MyCountryHomes.com, the daylilies tab at the top right to access pictures of my garden. Peonies, Iris and 200+ varieties of daylilies! ), politics, religion from time to time, places foreign, books and just plain old stories.
I look forward to lots of conversation.
Before I say "Goodby," I want to compensate Harry for the theft of his title by encouraging you to check out Harry's daughter, Jen. She makes some very nice music. Her site is:
http://www.jenchapin.com/
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