How Overpricing Kills Home Sales.

If there is one thing that will kill a sale- it is overpricing! Everyone know the logic, we think, "lets start high and then we can negotiate". Wrong! How can you negotiate when people are not willing to look at something that is overpriced?

Reasons overpricing will kill your home sale:
You WILL have fewer showings.
Less internet activity, fewer property tours, less activity.
It helps sell your competition.
Rather than having a bidding war, there are no offers to negotiate.
You are not creating VALUE in the eyes of a buyer.

Therefore, let's get serious and price it right. You will find that you are not following the market down. You save money in monthly payments. You take advantage of the low interest rates.

Like my Grandpa used to say, "Pigs get fed, Hogs get slaughtered." Don't be greedy but get what you can.

Salt Lake 2010 Market Forecast

Between 2007 and 2008 home sales dropped 42 percent, falling from 15,300 homes sales to 8,800 home sales.

However, in 2009 home sales increased 9,100 sales, a 3 percent increase compared to 2008. The increase in home sales in 2009 suggests that 2008 was the bottom of the downturn. In 2010, as many as 10,000 homes could be sold in Salt Lake County, a nearly 10% increase compared to sales in 2009. Since the peak, single-family home prices have retreated 13%.

Local housing prices will continue their drift downward in 2010, falling another 3% to 5%, the report noted.

At the end of the fourth quarter, the median price of a single-family home in SL County was $222,000, down 13% compared to $255,000 at the peak of the market (third quarter 2007).

Power of Curb Appeal

I had to laugh when I heard the following story from a good friend and investor client. He told me a story about his first investment property that sat on the market for 6 months with zero activity. "I never realized all I had to do was mow the lawn and give it a little curb appeal and waaalaaah! One lawn mow and it sold in a week!"
There is too many properties and too much competition. Your property must stand out whether it have better rents, more ammenties, and further more have curb appeal.

Here is a watered down version of my investor to do list.

There are four rules with investing in Residentail Real Estate
1. Curb
2. Kitchen
3. Baths
4. Sizzle features

Curb appeal captures buyers. First impressions are everything. It makes people want to stop the car. Over 90% of buyers find their home on the internet. If the front view of the house is not inspiring, they will NEVER get to your online property Tour. No matter what the inside of the home looks like, if the outside is not enticing, they will move on.
Curb appeal changes could include changing a front door, adding shutters, or even just mowing the lawn! Trim or remove trees or shrubbery, add a picket fence, or just add some water to the dead grass just do something. Be creative but keep in a budget. It is easy to go overboard on anything without a budget in mind.
Keys to curb appeal. Improve your buyers first impression of the home from the street. Be sure the porch and entry are clean and updated, feels comfortable, and safe. Minimal landscaping is necessary from adding additional mulch and making sure the grass is green. Finally, be sure there is some design elements (this could include front porch light, mailbox, door color, shudders, front entry, picket fence, front door knob....this list goes on). Finally, a fresh coat of paint never hurt anything.

$4000 Home Run 2 Grant

$4000 Home Run Grant is nothing but cash in your pocket! An Amazing opportunity to contract a property to build or purchase existing property that has never been occupied. Be sure to go through an approved lender, watch your deadlines, and apply EARLY!
Currently there are 500 new construction properties that will qualify for the home run grant in the Wasatch Front and nearly 200 in Davis County. For more details on these properties, email me at judy@rexut.com, or call 801-573-1601.

Web link:
http://b2b.utahhousingcorp.org/cgi-bin/R?P=HOMERUN2_INFO

HOME RUN GRANT 2 DETAILS

The property must be your primary residence. You DO NOT have to be a first time home buyer. Purchase a SFR, condo, PUD, Twin homes, town homes and even mobile (see details).

Homes that qualify:
1. Purchase a home contracted for construction, partially finished, or contracted for completion- be sure to reserve your Commitment by November 30 , 2009 and it must be completed by June 30, 2010.
2. Purchase a new construction home that has never been lived in.

Eligibility:
Single person with maximum income of $75000, couples $150,000
Cash buyers can qualify.

Good luck

Real Estate and Rents

I recently had a a tenant request a $50 reduction in rent. They have been renting for over 18 months with no late payments. Every quarterly walk through the property is super neat and clean. I signed a new lease agreement and they will continue to rent.
By keeping my steady income stream from properties it allows me to continue to fish for new properties in the market. I can show low vacancy rates and consistent income. In addition, it allows me to keep the property cash flowing even if more residential homes are to be leased, I am still competitive.
If I decide to refinance, I can show the income. In the end, it is a long term investment. As long as it cash flows, I plan on this property being very lucrative.

Decrease Has Upsides, Home Run Grant and Tax Credit.

Buying a home right now may be the best decision you can make! Reasons you should be buying today:

• Interest rates are low
• Rents are going up
• High property inventory
• Concessions are plentiful
• Free money is available (Grants, Tax Credits, local incentives)
  
• Creative financing available like never before
• Banks, Credit Unions, and Corporations are realistic
  
• Sellers are motivated

The last few weeks have been absolute dream come true for new home buyers due to the incentives, prices, and properties available on the market.
This week I sold 3 town homes and one residential home. Two were successful in qualifying for the $6000 Utah home run grant program and three received the $8000 tax credit. Not to mention the properties were great deals and the seller covered all their closing costs. These buyers were absolutely ecstatic.
This market really excites me. The market provides more inventory than ever before to pick and choose the home or rental property that absolutely fits. Sellers are willing to be creative in carrying contracts, cover closings costs, and even provide creative incentives.
However, if you want to take advantage of these opportunities you better move quick. According to City Weekly, of the 1600 home run grant programs, there were only 600 available 2 weeks ago. If you want to confirm you qualify, go to

http://www.utahhousingcorp.org/Homerun.htm.

The Tax Credit from the Government is available until November.
Today's opportunities are plentiful. The stars have aligned, all lights are green, its time to make a move. If you have been holding back because you have not found the absolute best deal then you are not looking hard enough. I look forward to assisting you and showing properties I have on my radar. It's exciting! Hope to talk to you soon.

Residential Rental with Cash Flow

What an amazing market to be creative. Fortunately, we can really help those that haven given up and are ready to walk away from their property. I know you have heard it before but, "Dont wait to buy real estate, buy real estate and wait." I just submitted an offer yesterday to purchase a single family home for my business portfolio. The owner wants out and will seller finance the property. After negotiating details on the phone, I am putting $5000 down and the price is $135,000. It is a 5 bedroom that rents at $1000 a month. This will be a long term hold with great cash flow.
My goal is keep this property and use it to 1031 into a larger multi-unit, development project, or another income producing property.

Commercial Deal with Great Terms

We closed on a property last week. The property was a For Sale By Owner Commercial building on State Street with 8000 square feet of commercial space and an additional 3000 square foot garage. We purchased the space for $410,000! Price per square foot is amazing and great ability to lease. Don't stop reading. We put $25000 down and the seller is financing the note for 7.5 yrs at a rate of 6%. Now thats a deal.

Value in Property

When establishing value with property we look at the features and benefits of a given property vs. the current competition. With properties sitting on the market, foreclosed homes increasing, and sellers getting more motivated- there is more and more competition.
My properties are selling simply by providing easy terms, understood incentives, and sticking to a bullet proof marketing plan. "VALUE" does not mean PRICE. Creating phenomenol terms, knowing how to provide funds, and keeping a disciplined schedule may be the difference. Call me, let me show you what I mean.

Foreclosure and Bank Owned Properties

We missed a bank property this week by offering $5000 too low on a $600,000 property. One of my daily tasks is to know of every foreclosure and bank owned property that hits the market. By networking with local banks, agents, and loss mitigators, I find out more about properties that will be coming. This provides my clients the best deals before they are on the market or the day of. Good deals go and others may see them too.
Well...get ready for it. More foreclosures are coming. If you have note read it yet check out the story at: http://www.sltrib.com/realestate/ci_11454615.
Daren Blomquist, RealtyTrac's marketing communications manager said, "Utah now ranks 13th in terms of foreclosures, compared with 20th place a year ago. Foreclosures appear to be rising at a faster pace now because the housing boom in Utah came later than other states, so the bust is coming later, too," She went on to say "We have some tough times ahead of us. Even though we're approaching record-high levels of foreclosures, we're still in a better situation than most other states," she said.
As many of you know, my goal is always to find 'MOTIVATED' Sellers. Although REO's are motivated, they are not my favorite. In fact, I am not a huge fan of foreclosures of bank owned properties for the following reasons:

• All homes are sold 'as is'
• No Sellers Disclosures
• A normal home inspection may not be enough
• Any internal damage, mold, or methamphetamines are unknown.
• Builder mistakes may be severe
• Our extreme climate may have caused damage and property may not be winterized correctly.
• The deal of the decade may be a money pit.

Although there are lots of deals available. Be sure to plan on spending more than the average $350 home inspection. Spend the time and money to get mold testing, meth testing, engineering reports, details from neighbors, and anything else you can. Consider hiring a professional contractor in addition to your home inspector. Better safe than sorry. Calculated risk is key when purchasing these types of property.

There is Hope

The great thing about our market isthere are opportunities. There are motivated sellers, people will carry financing, and renters want to stay somewhere nice. My dad always told me there are 3 things people always need: food, clothing, and housing.
I admit, it is not fun to see equity going down, jobs being lost, and people losing their homes. It's not fun taking a call from a client asking why their property has not sold and you have to explain that the price reduction you requested is a must not a suggestion. It's not fun seeing my parents heart sink every time the stock market drops.
However, there is hope. Even the people that have lost everything they have worked for can start moving forward and they do not need to wait years for a market recovery. In fact, many have said they will just start renting and try to qualify for a loan in 3 to 5 years. So here is what these people need to understand. No credit...No money...No problem.
While prospecting THIS WEEK I found 3 great deals that would benefit such a situation.
1. Owner has had a rental for 20 years. He wanted 10% down and then actually said he would take no money down if he got his price. This is in a good are in Salt Lake! He will carry the note for 20 years at 6%.
2. Seller rents property in Utah County and really just wants to stop land lording. Will carry financing.
3. Seller willing to sell their fixed up property at any price to get into their dream home. Yes, carrying the note is an option.
Lets keep pushing. There is hope. The harder we work the luckier we get. Call me, let me show you how.

Do What Others Are Not Willing To Do

The last few weeks I have had peers ask how I am selling property, finding good investments for clients, or how I am finding new business. "How are you closing deals?"
The answer...I continue to scratch at the concrete. I put my head down and go to work. I cold call, I knock doors, I call ads on the internet or newspaper, I have my assistant create lists for me to call and I do whatever I have to make more contacts, set more appointments, and sell my clients properties or find new properties for my buyers. I continue to spend money on marketing. I make sure I follow up on every interested call. It is the constant daily effort of finding, marketing, and being in front of people and properties. Its the daily routine and doing things constantly and consistently that has created some deals that would have never happened. I seem to get luckier the harder I work. The more consistently I do it, the more deals come about. How did the tortoise win the race, one step at a time.

Be Creative and Make It Happen

This last week we were able to close on two deals that likely would have never consumated and closed. This market is fabulous for creating win win transactions with creative techniques that benefit all parties. In addition, it makes deals close in a market where they would likely sit and never sell at all. That is why we are selling properties and our deals are closing.
Examples from THIS Week:
1. Our fixer upper property was under contract for $158,000. After all evaluations were complete and the day of closing arrived, we found that the buyers partner did not have his half of the money. Therefore, IT WAS DEAD. So rather than take the buyers earnest money and put it back on the market with 8,600 other homes I asked the question. "How much money was promised by your partner?" "What if I could provide you the money you need to make up for your partners lack of funds, would you still close?" Therefore, he came in with 30% down as required by the bank and we did a 10% carry back for 3 years. He was happy to save the additional 10% and my seller was ecstatic to earn a higher percent on her money than the bank would or money market would yield her.
2. We had a buyer that had $40,000 cash down but no credit. Also, they did not want their payments to exceed $2000 AND wanted a $500,000 home. Is this reality or fantasy land? Well...this is what we did. We searched the MLS and found a builder/agent wanting to sell. I proposed a few options and our goals, in the end we closed at $470,000 at a 5% rate for 5 years!!! No mortgage insurance and $40,000 down. Not only is that a good deal, the TERMS are powerful!
3. I am currently negotiating on an income producing duplex for myself. The term would be for 4 years at 8%. Sounds a little high but in reality by the time I am saving the cost of no mortgage insurance, no closing costs, and the ability to raise low rents to market rates, it really is the deal of the decade.

My point is this. This market has some deals that people really think would never happen or are simply over looked. So, just remember there is sunlight through the clouds and there are deals everywhere. Just think about it a little longer and be creative and ask, "how could I make this happen?"

It Can Happen, Anytime.

Two weeks ago we were bid out on an investment. The day of closing the deal did not go through for the other party. Although there were better offers on the table, we could close quick and they called us to close for our offer $20,000 less than competing offers. What an amazing deal. As I stated before, 50% of the time those deals go through. Always be the back up.

Since then I found a property with foundation problems for $99,000. What a deal right? But here we are two weeks later and it is still sitting on the market as investor after investor cannot seem to justify the price with the major foundation issues. Remember, I am not interested in what a property is but what it can be.
This property can actually be split into 3 lots and 3 townhomes built on the property. This property is not getting justice. I would take 20 minutes to have a preliminary plan approved and market it has a possible 3 unit development for $135,000. Would you rather have one junky house for $100k or a possible unit for $45,000 a door?

A fixer upper found this week

We located a real fixer upper this week for $185,000. It needed about $50,000 and would be worth $280,000.It was really a dump and needed significant rehab. There were 6 offers and It went for full price the first day on the market.
Interestingly enough, our offer was $20,000 less. When I asked the agent if we could be in a back up position, they agreed.
This is my favorite type of deal and this is why. Lessons to be learned:
1. Always stick to your numbers. A feeding frenzy can sometimes make you feel pressure that get you away from your numbers. Put a pencil to it and stick to it.
2. Always be in a back up position. I do not care if the next deal is cash. Anything can happen! My ratio of success is roughly 50% of back up offers go through. You do not get all of them but when they go through it is awesome.
3. There are more fish in the sea. This deal came up this week there will be another next week. It was just fun to see how many offers came in on the deal and how active this market really is. Like I said, this market is a great opportunity to get some good deals.