DEAN GRAZIOSI: DEAN GRAZIOSI REVIEW – REAL ESTATE FEED BY DEAN GRAZIOSI

You have done all your homework.  You know or sense that another broker or agent will be discussing the possibility of listing the property before a final decision is made.  The moment of truth has arrived.  At first, these meetings may have troubled you.  No longer.  Now, every listing we pursue shall be addressed in the same manner.

We will be true to our broker, true to our profession, true to ourselves and true to our client.  After all, they all go hand-in-hand.  Meanwhile our professionalism and handling of our marketing plan will blow the competition out of the water.  The seller will be so impressed that even if they take a meeting with another agent, they will be thinking about your presentation.

Good listing presentations begin with a relaxed, friendly disposition.  If you sense a price disagreement or are put off by the fact the seller will be consulting another agent, take that chip off your shoulder and concentrate on the job ahead.  Hey, this may well be the biggest asset in the family.  The seller is just trying to do what is best for their family.  It is up to you to convince the seller that what is best for their investment is to retain your services.

Your listing meeting begins well before you arrive at the residence.  In some cases, it may have begun months ago when you heard there was a possibility the home would come on the market.  Obtaining the perfect listing is often your ability to build both a personal and a professional relationship with the seller.  Brokers do not like to talk about it, but we know that is important.  There is a personal side to real estate and that is a side we enjoy.

You have built a personal and professional relationship wit the seller.  In fact, that is why you have arrived at the residence to make your listing presentation.  Because you have this relationship, you will always maintain your demeanor and will have the ability to present your case and marketing plan.

Before you arrive at the home, you have done your legwork and your homework.  You may even have confidentially consulted your office manager or other high profile agents in your office.  This is always a good idea.  You can never have too much input from knowledgeable experts.  

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As every real estate agent knows, the most difficult part of getting that new listing is establishing the right listing price.  If there was not a human side to every listing price, arriving at the fair market value is relatively simple.

Well, there is a human side to the listing price.  And, that component needs to be addressed.  Once in a rare while, the listing agent meets a seller who wants professional advice and truly acknowledges the fair market value.  However, those sellers are few and far between.

More often, the seller is aware of certain homes that have sold in he neighborhood and can build a street-savvy, hearsay case for their own selling price.  Rarely, is the seller’s idea of a listing price on the mark. 

The agent must now walk a delicate balance taking into account the fair market value and the personal feelings of their client, friend and seller.  That is the tricky part, isn’t it? 

At the same time, the agent must be professional, courteous, filled with integrity and accurate.  We all know that, historically, we have been surprised.  Sometimes, listings have sold for more than our data suggested.  Far more often, and especially in the current marketplace, listings have sold for less than was merited and below market value.

While there is no question that this is a buyer’s market, houses are selling.  And, properly priced homes sell for market value.  Brokers and their agents know that it is a buyer’s market and, don’t kid yourself, so do your sellers.

Even though a property’s fair market value may be less than your seller hopes, the agent’s responsibility is to provide an accurate fair market value analysis and a well-designed marketing plan that will accomplish that goal.  These two components go hand-in-hand and experienced agents know that one without the other does not work.

Yes, agents do take certain listings at above market value prices, but they have upheld their integrity and the integrity of their firm by advising the seller of the true market value.  If the seller chooses to disregard the recommended asking price and fair market value, the agent then has to make a decision. 

Many times, the agent will take the listing above market value with the agreement that a reduction will occur within a certain time frame.  We dislike admitting it, but we all know that happens.  This can actually be a strategy certain brokers and agents employ.  Yet, even that strategy will only work if the true market value has been discussed and substantiated.

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Effective February 1 2010,the FHA will implement its new condominium qualifying requirements for condominium associations.  In addition to complying with providing access to association books, the association must comply with collection policies and have no owner who owns more than 10% of the units.  There are other management responsibilities.

For new condominium associations to qualify for FHA or Fannie Mae financing:

·                     50% of the new units must be pre-sold before FHA financing can be approved

·                     50% of the units must be owner occupied

·                     Individual owners must purchase HO-6 insurance policies if the association policy does not cover interiors

·                     Re-certification is required every two years

These changes are designed to protect the investor, the lender and the FHA, who has suffered losses on the unregulated condominium market.

As no owner can own more than 10% of the units, no single owner can control the fate of the association.  The FHA’s 3.5% down payment requirement for approved FHA developments will generate new demand and should assure value stabilization for approved condominiums.

Combined with the extension and expansion of the homebuyer tax credit program, new and existing purchasers can apply the credit toward the down payment and closing costs.  Condominium associations that achieve FHA compliance can expect the stagnant condo market to turn very quickly.

From an investment standpoint, purchasers and sellers will do well to participate in their association’s compliance initiatives.  The reality is that real estate agents will be leaning toward handling approved condo developments compared to associations that do not comply.

Meanwhile commercial lenders will be requiring FHA approval commitments from their developers. These developers will want to approach lenders with their FHA approval in hand.  With the favorable down payment, demand is bound to increase.  Investors will do well to research a condo development’s status prior to investing.      

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