Tim's Atlanta Real Estate Blog: May 2007

This is just too unbelievable to me.

Fannie Mae ... estimated up to 50 percent of the borrowers, whose sub-primes it bought that year, had credit profiles that could have qualified them for prime rates.

Freddie Mac...estimated that borrowers of 15 to 35 percent of all sub-prime loans it bought in 2005 could have qualified for prime-rate loans

This was in a story I just read on cnnfn.com. 

They then quote a 1999 survey which found that 31% of all buyers never spoke to anyone except their real estate agent when they bought their home.  They get a dig in at real estate agents insinuating I guess that agents are steering their clients to lenders who are ripping them off.

"If you've got plenty of money and don't mind not getting the best rate, listen to your realtor."

I really resent that statement.  Why would a real estate agent want their client to end up with a more expensive loan than necessary?

I don't doubt that lenders might be tempted by the higher fees with a sub-prime loan, but I just don't see a real estate agent consciously being part of that game. What's in it for them?

All you lenders out there.  Come clean here.  Do you know of anyone who was put in a sub-prime loan when they in fact could have qualified for a prime mortgage rate?  I'm hoping that this is just some outrageous story that must have some other explanation.  Or are there a lot of sleaze ball lenders out there? I guess I hang with the good crowd.

This past weekend was very productive.  I had an out of town buyer come in on Saturday and we negotiated a contract on Monday after we saw a total of 28 homes.

This is a very typical experience for me.  It usually starts with a buyer finding me by doing a Google search.  They begin to use my IDX home search tool.  They begin to read some of the articles I wrote on my website and decide to give me a call. 

They tell me their situation.  If I feel that I can help them, I get them to send me an email with a list of their criteria and a list of homes that they are interested in seeing.

This weekend's clients were only going to look at homes on Saturday with me and then spend Sunday driving around and exploring various neighborhoods by themselves.  They were were planning on coming back in a few weeks for a real buying trip. They weren't certain about the specific neighborhoods but thought that they really wanted something a little newer.

I put together a tour of homes for Saturday.  I ended up with 19 homes out of a stack of 60. I wanted to give them a taste of different areas (Northlake, Decatur, Oakhurst, Kirkwood, East Lake, Lake Claire, Midtown, Morningside, and Virginia Highlands.) and show them various styles of homes.   I threw in a few old homes just to see their reaction.  I created a custom map and plotted out an efficient route. The husband really loved the map and was able to follow along as we were driving.  This allowed him to get familiar with the area and to know exactly where we were. 

At each home I gave them the listing sheet for them to take notes on.  The wife was taking pictures of each home until her batteries gave out. Then I filled in as the photographer.  We completed the tour of 19 homes in 6 hours, which included a lunch break(even though I had nuts and beef jerky in the car.) 

I noticed that they really liked a few of the older in-town houses.  I brought along the 40 other listing sheets of homes that didn't make the initial cut.  From these, we decided to take a look a three more homes. Home number 21 was a winner.  The wife wanted to put in an offer right  then and there.   I recommended that they should see a few more homes in this particular neighborhood before they decide to put in an offer. I was planning on taking Sunday off but  I volunteered to show them 6 more homes in the morning. If this home still seemed good, we would write up an offer before they headed out of town.

Between 6pm Saturday and 9 am Sunday,

• I searched for a few more homes to show them
• set up appointments for the next morning
• talked with the agent of the home they were interested in
• got the property disclosure
• ran a CMA for the neighborhood
• prepared a partially complete contract
• ran a CMA for the neighborhood of there second choice, just in case 

On the way to meet them at the first house at 10am on Sunday, they called me to let me know that they had been driving around that morning and picked up some flyers of homes that they wanted to see in the neighborhood of their second choice.  When we met at the first house, I was able to pull up  the showing instructions for these homes using my wireless laptop computer.  We set up 3 more homes to see on top of the six that I originally had set up. 

We spent a lot of  time going over various aspects of the home they loved from the previous day.  It was a 1920 Craftsman bungalow with no garage and hardly any closet space.  They seemed to be changing their mind on this one.

We then went to take a look at their second choice along with 3 other homes in that particular neighborhood.  One of the homes was even a for sale by owner.  After seeing all of these homes, we sat down to discuss if they were ready to move forward on any of the homes. 

The wife changed her mind about the first house and now wanted to make an offer on her previously second choice home. This home was only 6 years old, had a garage and plenty of storage areas.  The location to them was as good as the first one.  I recommended that they spend the rest of the day exploring the immediate area and if they were still interested in it, I would meet them at my office at 9 am on Memorial Day to have them sign a contract to purchase. 

I woke up early on Monday and 

• prepared the contract
• talked with the listing agent
• met my clients at my office
• went over the contract in detail and I answered all the questions that they had
• prepared them for how the negotiations might develop.  We thought about what we might do if they countered in various ways
• gave them recommendations for inspectors and attorneys in case our offer got accepted. 

After two hours, they were on the road for a six hour drive back home.

I faxed over the contract to the listing agent.  I discussed the details with her.  She thought the offer was really low but said she would work see what the sellers wanted to do.

We received a  counter back within an hour.  I contacted my buyers on their cell phone.  We countered verbally.  The sellers countered verbally a second time. We accepted their offer, 6% below list price, and followed up with a signed contract on Tuesday morning.

I put together a real estate show of about 30 pictures of their new home so they could share them with their parents and friends.

On Tuesday we got signatures on everything, I got my buyers a copy of the covenants and restrictions, and my buyers started setting up all of the inspections.

I'll be here for them and be able to make everything go nice and smoothly.

This is a very typical transaction. I really don't know how these buyers could have accomplished this themselves. I guess that's the value of using a buyer's agent when moving to a new city.

Who in their right mind would be real estate partners with their mother in-law?  Well, I guess that would be me.

I started in real estate eight years ago by joining forces with my mother in-law.  Sandie was a fairly successful  agent for around 18 years and had worked worked for various brokers over that time.  She encouraged me to come into the business with her.  I had always been interested in real estate and thought this might be a great opportunity to test it out.

Sandie was thinking about winding down her career and saw an opportunity to pass on her client list and good will to a family member.  She was good with people and had a database of around 150 people. At that time, Sandie had never sent an email or been on the Internet.  We were logging directly into the MLS database computers.  We didn't have a digital camera.  We were glueing 4X6 prints onto flyers. 

I brought technology to the business little by little.  Sandie taught me the nuts and bolts of real estate while I taught Sandie all about computers and the Internet.  Our best move was getting our website online in October of 1999.  The next best thing we did was getting an IDX home search tool up on our website.  It seemed to be a pretty radical thing back then. 

People always ask us how we get along.  We have very different personalities and mother in-laws are just a problem to begin with.  I guess we have learned how to tolerate each other.  We both work with our own clients for the most part but split all commissions 50/50.  We can always step in for each other when one of us is too busy.  It really gives us a lot of scheduling flexibility that we wouldn't have if we were working by ourselves.

It's also nice in that it allows us to cast a larger net as far as attracting business.  It's good diversification. Some people only want to work with Sandie while others only want to work with me.  Sometimes Sandie is on a hot streak when all of my deals seem to be falling apart.  It smooths out the ups and downs in the business.

I also don't have to worry about getting cheated in any way.  We  have each other to bounce things off of.  When one might be getting frustrated with a situation, the other can step in and keep things under control.

My wife probably likes it too.  It gives her the ability to have someone keep an eye on me.  Sometimes when my wife and I have disagreements, I can kind of get my side across more easily by explaining things to Sandie.  It's kind of like having an interpretor.  Women sometimes seem to be talk a different language.

The bottom line is that we compliment each other pretty well. 

Working with family members creates its own challenges but also generates some nice opportunities.

Lately I've been showing homes that have a very distinctive odor. My buyers and I comment on the smell and usually end up assuming that it is the smell of a home with some kind of water problem.  It's a slight sour smell similar to laundry that sits in a washing machine a little too long before being put into the dryer.

The other month I finally discovered the source of this sour smell.  To my surprise, it seems to be coming from these new plug in air fresheners.  I think the fragrance is supposed to be green apple or maybe sour apple.  Now when I walk into a house and smell that smell, while my buyers are talking about a possible water problem, I'm busy looking around trying to find where the plugged in air freshener is.  Usually my buyers don't believe me until I hand them the air freshener for them to smell for themselves.

If you are going to use an air freshener, I would make sure it is a scent that is well recognized as an air freshener, maybe something like pine forest.  Please don't use anything that has any sourness to it.  It will surely send up some red flags and give buyers the wrong impression

Personally, I would never use these things.  Who knows what kind of chemicals they are releasing into the air.  I did a quick search and found a disturbing article about the possible health effects due to plug in air fresheners.

I'm sure you've been there.  An agent tells you to fax the contract to her home fax machine.  So  you press the send button and wait for that lovely squealing sound of fax machines talking to each other.  Instead, you hear "Hello. Hello?" and a click of someone hanging up. 

You're not quite certain if they gave you their regular phone number by mistake or whether they have a machine that they need to switch over in order to receive a fax. You go check the numbers you wrote down to see if you made a stupid mistake. 

You decide to call them up to let them know that you are going to send a fax and to verify the number is correct.  But now when you call expecting to speak to that person again, you get belted with that lovely fax machine squealing sound. 

Now they see that nothing came through on that fax so they call you up to tell you that it didn't come through.  Unfortunately, at the very same moment you figure that now that they have the fax machine switched on, you'll go ahead and try again.  With them trying to call you, you end up getting a busy signal. 

This usually always happens when you don't have any time to spare.  You thought that it would take you a couple of minutes.  Instead, it ends up taking you a half hour just to send a stinkin' fax.  It might have been quicker to just drive over and drop it off in person.

If you don't want to get a dedicated line for a fax machine, you should really consider using something like Efax where people will never get a busy signal.  Your faxes come in as a PDF file in your email. It makes it so much easier then to forward it on to another party.

I feel much better getting that off of my chest. 

I've seen all kinds of variations on how to refer to active|rain.  I am never certain how I should refer to it or how to spell it.  Is it one word or two words?  Is either word capitilized?  I know that NAR wants REALTOR® to always be a certain way.  Does ActiveRain care how their name is spelled?

Can we maybe have a consensus or should we all wing it and be creative? I am a big believer in trying to practice good spelling.

The spell check tool here flags ActiveRain but the only viable alternative it gives is Active-Rain.  Surprisingly, active|rain doesn't get flagged as being misspelled.  To do the verticle bar thingy, hold down the  shift key while pressing the \ key which should be above the enter key.

Do you ever get in a situation where you tell someone the complete truth in order to be a nice guy and they think you are just trying to trick them?  It's kind of funny when you are being totally up front with them in order to help them out and they just won't believe you.  I'll reveal a big secret to you all, I don't bluff. 

My partner and I had a listing.  An unrepresented buyer wanted to make an offer.  We sent over the forms on Thursday  and offered to meet them on Friday to help them fill them out.   For whatever reason, the buyer wanted to wait until Monday.  I told her that there would be a chance that over the weekend someone else might come in with another offer.  She didn't take our advice and waited until Monday to submit her offer.

We went back and forth several times and my seller was willing to come down in price because they were getting nervous about getting their home sold.  There were two items that got us bogged down for two days.  The buyer wanted a 30 day inspection period and wanted the earnest money to be $1000.  We wanted the inspection period to be 10 days and wanted earnest money of $3000. 

Any buyer's agent would have be able to take them aside and tell them that a 30 day inspection period was crazy. We weren't in too much of a rush because the house was being shown a lot and we kept hoping for a better offer.   Finally the buyer agreed verbally to those terms on Friday, 8 days after we started.  We quickly ran over to the buyer to get her signature on the forms. 

Well, a funny thing happened on the way to get the signatures of the sellers.  We got a call from another agent who had someone who wanted to put in an offer.  We told them to submit it immediately because we were almost ready to sign off on another contract.

That agent got us an offer within the hour.  It was an offer better than the one we were ready to sign off on.  As a courtesy, we called the original buyer to tell her that we just received an offer that was higher than hers and we were willing to give her the opportunity to increase her offer. 

Well, she thought she was pretty smart and figured we were jerking her around in order to get her to increase her offer.  We told her that we don't work that way and that she really was ready to lose the house.  She just wouldn't believe us.  She called our broker to tell him that we were devious and unethical.  She called our seller up to report to her how unethical her agent was.  Our seller told her that we were doing exactly what she wanted us to do.  She wanted to give her the opportunity to buy her home.   We could have just taken the other offer and told her what we did afterwards but thought it best to tell her and give her a chance.

Our seller also revealed the fact that we would actually be making half as much commission on this new offer.  So money was not motivating us.  Getting the best deal for our seller was what we were doing.  That's what having an agent is all about.

Remember, time is of the essence.  Also remember that I usually never bluff.  If you want to project your own devious negotiating techniques on me, don't come crying to me when you find out I was telling you the truth. 

I've been using GoToMyPC.com for several years now.  It allows you to access your computer from any other computer that is connected to the Internet.  It has been a pretty good tool for me.  I like having all my email sorted and kept organized on one main computer.

A colleague in my office turned me on ot LogMeIn.com.  It's the same kind of service as GoToMyPC.com but I have found two things that will make me switch.

• $69.95/year vs. $179.40/year
• LogMeIn.com allows me to allow a guest to access my computer with me.

I'm always one to experiment and do comparisons so I set up my laptop with my Verizon broadband wireless card next to my office desk top computer and watched the two screens as I performed various tasks.  Both programs seemed to be equally as fast.  There was only a split second delay between my laptop and my desk top. 

Both programs allow you to transfer files from computer to computer. 

Both programs allow you to print from your computer that you are accessing to a printer you have at your remote location.

LogMeIn.com allows you  to the easily set up a guest to be able to access your computer with you.  I haven't tried it yet but my colleague used it with a client of his when they were having trouble navigating a website.  You send them an email with a link which then allows them to see or control your computer screen from where ever they happen to be. 

I am thinking of using it to look at homes together on the MLS with a client without them having to come to the office. I find that many people are impressed with all the tools that I have access to to search for information about houses.  How awesome would it be to take a second to send out an email to a caller and then do a dog and pony show on your computer while they watch their screen and listen to you on the telephone.

One thing that I finally figured out after all these years of use is that if you have different size monitors you need to use the "actual size" setting instead of the "fit to page" setting.  When you do this, the graphics are exactly what you would be seeing on your main computer.  I had always complained about how fuzzy things were when I used GoToMyPC.com because I had always used "fit to page" and it would reduce the page and make it difficult to read.  So play around with those setting.  You can get it to be crystal clear.

So with the extra "invite guest" feature and all other things pretty much equal, I don't see any reason to pay an extra $110/year by staying with GoToMyPC.com. 

My wife and I spent a few days at a bed and breakfast celebrating our 13th anniversary. We got a place up in the mountains of western North Carolina located on the shores of Lake Santeetlah in Graham county.  It was about a three hour drive from Atlanta. What a beautiful area.

We crossed the North Carolina border around dinner time on Sunday night and started to look for a decent restaurant to eat dinner at.  We were really surprised at the lack of anything other than fast food.  We finally passed a few restaurants in Andrews but they were closed on Sundays.

What we found out from our host at the bed and breakfast is that Graham county is a completely dry county.  No alcohol can be sold there.  They do have a small loophole for a few lodges to sell alcohol in their restaurants.  He said that they can't attract many restaurants to Robbinsville, the county seat, due to this. They have a Mexican restaurant in town but my wife really likes a good Margarita with her nachos.

You can't even buy a six pack of beer at the supermarket or gas station.

What are these people thinking?  Graham county has some of the most beautiful land I have ever seen.  But they are the second poorest county in North Carolina. They have great potential as a tourist area but they aren't going to attract the businesses that they need to become a good tourist area with the alcohol restrictions.  I'm not a big drinker, but I do like the option of being able to buy a beer with my meal or to have a beer in the evening. 

I could not live in a dry county.  It's not the alcohol as much as what it tells me about the people living in the area.

I got thinking about how a decision like banning alcohol sales can have an effect on the price of real estate.  Would opening up alcohol sales spur new businesses in the area which would then attract more people which would then create more opportunities for the local businesses? 

Maybe the folks up there are happy with stagnant growth and want things to remain as they are.  Maybe they still have a big moonshine industry that they are protecting.  It seems silly to me.

I know I wouldn't live in a dry county.  Would you?  Maybe the goal is to keep people like me out. 

I almost had to play marriage counselor to a young couple today at the closing table.

My buyers weren't married.  They were buying a home together first and were thinking of getting married sometime in the future. I don't pry too much into personal details.  I assume they are adults and are doing what they think is best for themselves.

The young man was putting 10% down and was going for a no doc loan.  Since he had a great credit score and she had an awful credit score, he applied for the loan by himself to make things go smoothly.

I don't get involved with the loan details.  I have a great loan officer who I trust to give expert advice.  I just assumed that the couple had gone over the details on how the loan would be structured and how they were going to own the home.

Five  minutes into the closing, the young lady asked if she would be signing anything.  When she saw that she wasn't part of the transaction, she excused herself and left the room.  I assumed she wanted to make a few phone calls or something.  The young man continued to sign all of the papers, and just when he finished the last paper, the young lady came back and dragged him out of the room and to the car.  There they apparently had a good heart to heart.

He thought like a man.  He just wanted to take the path of least resistance and do what was necessary to get the best loan with the minimal hassle.  He didn't want to discuss her low credit scores with her and just wanted to get into a house that she liked with the least amount of effort.

She was upset with him that he hadn't discussed any of this with her.  She said that she would not be moving in if she wasn't a part owner of the home.

He came back in and told me that her  mother had advised her to not move into that home with him unless her name was on the title.  I told him that I thought her mother was a very wise woman.

I told him that it was a very easy thing to get her on the title.  If he was serious about getting married, it would be a wise thing to do.

I usually deal with married couples so I didn't pay attention to the ownership details.  Next time I'll make sure I bring this up early in the process so these issues can be addressed up front. 

Guys, I don't understand women that much but one thing that I do know is that security is a big part of their happiness.  Moving into a home that she doesn't have an ownership interest is just laying a bad foundation for a happy relationship.  No matter what, you end up losing everything anyway.  You might as well have them happy while it lasts.  Hopefully it will be a long and happy life together.

I know there are many people out there lurking in the background.  You are reading these blogs but are afraid to make your presence known. You might not leave a comment for fear that you might identify yourself as a potential prospect and then get hounded by thousands of agents.

Fear not. 

A comment can be made without the requirement of filling in your email address.  I just tried it and it worked.  You don't even have to use your real name.

Many members who post stuff here at Active Rain do it because they want exposure to the general public.  Many who started early on took the leap of faith that the time spent here would not be in vain.  Sooner or later, their voice would be heard.

A big question that many have is whether or not anybody in the general public is actually reading this stuff?  Are we all just talking to ourselves?  Are we providing the public with any value in our ramblings here?

So do us a big favor.  If you are reading this and are not a member of Active Rain, please take a minute to tell us what you think about what you read here.  Remain anonymous if you want.  Don't leave an email address. 

Just give us a sign on whether anyone is out there and tell us what you like the most.

I think I have the smartest and best kids a guy could ever dream of.  The things they say and do just make me so proud.  I wanted to share some things that I had written about them in a newsletter a few years ago.

The other week, Rebecca, my 6 year old daughter, was telling me that I wasn't the boss.  She decided that she wanted to be boss and tell everyone what to do.  I asked her if she wanted to be the top boss, President of the United States.   She thought about it and asked me just how one gets that job.  I told her about elections and such.  She then asked if a girl could be president.  I said that there wasn't a rule against it but so far there hasn't been a girl president. Her eyes lit up and she said that she wanted to be the first girl president.  Then after listening to me explain what a president does, she told me that she'd rather just be a rock star diva as she originally planned.

The other month we were in the car with the radio on.  The news report played the sound clip of Howard Dean after the Iowa caucuses.  The one where he lets out a cowboy like yell YAAARRRRAHHHHH!  Rebecca asked me who was that on the radio?  I told her it was someone running for president.  She matter of factly said, "Daddy, that isn't how you get to be president."  I definitely had to agree with her on that one.

Benjamin, my five year old son, thought up a great idea.  He wanted to have a "topsy turvy day"  where the kids were the parents and parents were the kids.  Rebecca thought it was a great idea.   She wanted to make the rules and be the boss.  I told her I loved the idea also.  I said that I'd love being the kid as long as she was prepared to go to work and pay the bills, make us dinner, do the laundry, etc. etc.  It didn't take her long before she told Benjamin that topsy turvy day probably wasn't such a good idea.  She said that it's good being a kid.  Benjamin quickly adjusted and said that it would only be topsy turvy tonight.  That way they could be in charge of what we watched on TV and when they went to bed.  It's nice to know that kids can appreciate how good they have it.  It's good to be a kid.

Last month we went to the school bonfire pep rally.  The booster club was giving out free cotton candy and hot chocolate.  The kids waited patiently in line.  When Rebecca and Benjamin got their free cotton candy, they automatically said "Thank you".  The booster club volunteer manning the station told them how nice it was that someone had finally said thank you. They were the first.  I then heard a few older girls next in line telling each other to make sure to say thank you.  Needless to say, I was so proud.  Manners are contagious.  Sometimes it just takes a little reminding.

I started  being an assistant coach for my son's soccer team.  Wow, I almost quit after the first day.  Trying to get seven 5 year olds to pay attention and learn some basics of the sport was more difficult than I ever imagined.  But I learned more than anyone.  Keep it simple, get everyone involved, and get everyone to agree on a few rules of conduct.  Then just step back and encourage and just enjoy what happens. 

The other  night I was giving Benjamin a bath.  We usually use this liquid soap and several times he has gotten into trouble with me by emptying the entire bottle of soap into the bathtub and creating a bubble bath.  After I wash him I usually give him 5 minutes to play around in the tub.  I stepped out of the bathroom and Benjamin called me back.  He said "Daddy,  why don't you take that bottle of soap away because I know I won't be able to help myself."  I have to give him credit.  He knows his weaknesses and takes steps to lessen the temptation.  They say that the first step is to realize you have a problem.

Now that they are a few years older, they are giving me some good advice for problems that come up in the course of business.  Sometimes I find myself bouncing ideas off of them and getting some really good feedback.  When they like an idea, I know I'm on to something good. 

This is the 7th post of a series I'm calling "Life is Great".   I used to send out a newsletter to past clients and I always tried to include a "letter from the heart" article.  Just feel good stuff and stories about my kids and life.  Hope you enjoy them.  If you liked this  one, go ahead and subscribe to my blog so you don't miss tomorrow's edition