It’s a common question and an even more common problem in today’s real estate market.  Competing with the builder to sell your home.  Knowing the builder’s position and promotions will give you a lot of information on how you should approach the sell of your home.

First things first, let’s do the short answer:

Do Builder Incentives Affect Value? SHORT ANSWER:

They do not affect Value directly, instead they tend to drive the price negotiated down on resales only in the neighborhood and do not typically affect surrounding neighborhoods.

Having a professional Realtor is the key to success and there is one thing to remember.  Above all else, price is king.

Some keys to success when competing with a builder are:

• Know the Market - Like any professional Realtor should know, you need to know what you are competing with.  Will the "Biltmore" take 8 months to build, and you have one that is move in ready?  Does your lot allow for the only 3 car garage?
• Know the promotions - You can do two things, you can attempt to match the promotion or show value elsewhere.
• Accentuate the Differences - Make sure that buyers know why they’d want your home over the builder’s.  Maybe you’ve finished some additional bedrooms, added a pool, or perhaps you "worked out the kinks."
• Work the Community - Most sales from new neighborhoods in more rural areas are referrals from the neighborhood.  Take advantage of it.
• Remind the Buyers - THEY CAN MOVE IN TO YOURS QUICKER.  They can get an inspection and have a real person to deal with.  Most builders have rigid contracts and are not really interested in lots of negotiations.  They’re simply less agile than a home owner is.

Be sure to hire a professional Realtor to help you with this trying process.  It doesn’t have to be an agent that lives in or near the neighborhood, in fact, hiring an outsider could be a good play, since their "sphere" might be people who would want to relocate to your neigborhood.

It happens more often than I care to repeat, but there are people out there that I really don’t want to work with.  I’m sure those of you who are reading this article are not part of this bunch, but if you are no worries.  My Christian natures pretty much require that I love you as a brother or sister, but I don’t have to work with you, nor you me, for that matter.

I’m all for being blunt and honest and frankly I’ve lost a few clients that way.  I’m not eloquent.   However, what I am talking about today is a guy named Steve.  He could be named Joe, Bob, or even Samuel, but we’ll call him Steve.

Steve Doesn’t Get It.

Here’s the scenario: Steve calls last minute and would like me to show him some homes.  He’s going to buy a home for his daughter, he may want one for himself, and he even has other "family" thinking of moving.  He’s sounds like a nice guy and I’m sure he is.  He certainly doesn’t want to put me out, but he’ll really only be available tomorrow.  He’d like to see something tomorrow and come back and BUY something a little later.

Bare with me it gets better.

I inform Steve that I COULD cancel or move appointments for him , but if I am going to do that, that I would require a Buyer Brokerage, or a Fiduciary Agreement with him so that I could be his Realtor of choice .

NOPE! Out of the question.  Steve says he knows Real Estate and whoever shows him the home wins and if he finds it on his own, the listing agent wins.. big time. I ask him more about his situation, but people like this are all the same.  It’s not that they are just plain stupid, I just think they don’t use their brains.

Let me get this straight…

You are turning down:

1. A Free Service
2. A Service that will save you more then you could possibly save by yourself
3. A Service that will save you time and hassle and protect your earnest money (deposit)
4. A Service that may very well save you from litigation

Basically, he doesn’t see the value in the service that is provided, he just wants someone to let him in the homes.

That’s a smart plan, Steve.  Good luck with that one.  I prefer to work with and for clients who want to work with me and understand that my job was never to find or show them a home.  ANYONE CAN SHOW A HOME.  I get paid to negotiate.

If I (or should I say my Seller) get really lucky, Steve will buy one of my listings in Alpharetta or Gwinnett County and I will be able to demonstrate this skill to Steve up close and personal.

For Sellers out there in Alpharetta. If you want someone who can take advantage of people like Steve, please give me a call, he should be buying in 3 to 6 months.

It’s come full circle, I’m loving short sales from a seller representative standpoint due to the fact that it helps get them out of a situation that could devastating to them financially.  For a long time I’ve not enjoyed showing short sales to my buyers, simply due to the hassle.  Having closed several this year, I’ve got a new look on short sales.

So Why Should A Seller Short Sale?

First of all, you need to know what a short sale is.  GO here to read about what a short sale is .

So assuming you are a seller or home owner and have some sort of hardship and do not want to stay in your home, you can short sale.  But what is the difference between just giving the home back to the bank (Foreclosure) and a short sale.

• Foreclosures Stay with you for 7 years
• A foreclosure on your credit report will cause you to pay significantly higher rates for your next home, but also cars, credit cards, even insurance.
• A foreclosure on your credit report will require you to put more money down on your next home, but also cars and some apartments.
• Once the notice is given, the home owner will only be so for 30 days (in Georgia) and could face eviction as soon as 30 days.

A short sale on the other hand,

• A short sale stays on your credit for only 2 years
• Does not devastate your credit score as much.
• Can allow the home owner to stay in the home for up to 6 months in some cases without a payment.

So if you or someone you know is in financial distress, please call me at 770-374-4667.  If I cannot help you directly I can direct you to someone who can.

NOTE: Please consult with an attorney or accountant regarding your own financial matters.

Short sales are listed on the MLS, and you can search for all the homes in Georgia by going here.

With Rates in the low 5% and mid 4’s% (for some), buyers are back in a big way.  Great Deals used to sell in 2 weeks or less are going the moment they are listed.  Good Deals are now moving much quicker and homes are getting showings.

So Christmas will be coming THIS year as more people find homes and sellers start to see more offers… at least my clients.

Before you get too excited about a small shift in the market place, it’s still a great time to be buyer and it’s still a buyer’s market (but for how long) but it’s also a great time as a seller to put your home on the market because:

• Interest Rates are super low (making your home more affordable)
• There is less foreclosure inventory on the market (Equals Less Inventory)
• Banks are more reluctant to do short sales since they might be able to do a modified loan to keep the person in the home (Equals Less Inventory)
• Builders are not building at all anymore but the ones that have home standing are selling at highly reduced rates (less inventory)
• Now is a great time to MOVE UP! (if you lose 3% on $100,000 that is $3,000, if the next seller loses 3% on $300,000 that is $9,000 making it a $6,000 gain)

Why it’s great to use the Jarvis Team at Keller Williams!

1. Winner of the 2008 Consumer Choice Award
2. Winner of the JD Power Award for Consumer Satisfaction
3. Number 1 Office in Gwinnett County. Our market share continues to grow while other’s decline.
4. We can put your home on the first page of Google, Yahoo, and MSN.

One of the most important steps in the home-buying process is being pre-approved for a home loan. Many buyers apply for a loan and receive approval from a lender BEFORE searching for a home. This is called “pre-approval.”Why is pre-approval important at the beginning of the home-buying process?

• Pre-approval can cut days or even weeks off the closing, because the lender has already conducted its credit analysis and approved you for a mortgage.
• Pre-approval strengthens your offer and negotiating position. A home seller will often choose to accept an offer from a buyer who is pre-approved for a mortgage over one whose financial picture is still in question.
• Pre-approval will determine your price range and narrow your search parameters. Based on your down payment and that pre-approved mortgage amount, you will know how much you can afford before you even start looking for a house.

There is also a significant difference between buyers who are merely “pre-qualified” and those who are pre-approved.

Pre-Qualified Buyers - are those whose lenders have determined how much they can borrow based only on information the buyer has provided to the lender. Nothing has been verified to determine the buyer’s true creditworthiness. The buyer still must fill out a loan application and go through the lender’s approval process.

For buyers who have been pre-approved, the lender has already done a credit check along with verification of employment and deposit. The lender’s pre-approval is a commitment to loan the buyer up to a certain predetermined amount. The only piece missing is the lender’s appraisal of the home to confirm its value.

Contact me when you are ready to purchase your next home. And let me know if I can provide any additional information about pre-approval or financing options.

Real Estate across the country is different.  In some state, it may take 90 days to close while in others, like Georgia, 30 days is the norm.  Additionally, in some states you can close at a title company’s office, in other states you may get an attorney to help coordinate the closing while still in other states (Georgia) your Realtor is the one who coordinates for you. In Georgia, a Realtor has a fiduciary responsibility to look out for your best interest.

So what does fiduciary mean? Wikipedia defines it as,

A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person they owe the duty (the "principal"): they must not put their personal interests before the duty, and must not profit from their position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.

This agreement is set by a contract known as the, "Buyer’s Brokerage Agreement."  If an agent does not go over this relationship with you AND asks you to sign it before helping you, they are not looking out for your best interest. It only with honesty, loyalty and integrity that someone can represent you in the biggest transaction of your lifetime.

It’s more than just searching for homes, it’s knowing the market and identifying good investments, negotiating the best price, protecting your investment of earnest money, looking out for your family in their move and it’s about telling you that you might consider waiting to purchase or not purchase at all in certain situations.

When a buyer is looking for a new construction home, the question always comes up, "Is This A Good Builder?"  It’s a loaded question to say the least.  Although, the Real Estate Commission will be upset about this, most agents DO have opinions about the builders.  The bottomline however, is that an agent’s answers are based purely on their perceptions of a builder or their direct experience.  Keep in mind that even the most successful agents whose team closes 600 transactions or more a year, may only have a few transactions with a builder.

Still, the question remains.  So should you buy from a builder or not? There are some key things worth mention and I’m also a firm believer in bringing in the inspector early on.  Having the inspector there early on will "catch" many of the issues.

See, the truth is that most builders are not inherently bad.  Instead it’s the people they hire that make the difference.

For example, you could have a fine, upstanding builder who hires an equally qualified general contractor to manage his subdivision.  He in turn hires excellent framers, concrete people, electricians, plumbers, drywallers, painters, carpet people, lighting, landscape and fixture folks and of course, "punch out" people to finish up.  There may even be designers, realtors, and other people who have some input.  Last but not least, let’s not forget that the county will likely want to inspect and of course they have their own people in on the deal.

If one or two of these "hires" or contractors has a bad day, bad employee … bad "run" then you’ll end up with 5 to 10 homes that all have a leaky shower for instance.

Building a bunch a homes very quickly isn’t always a bad thing, but it gives the builder a smaller margin of error.  One wrong move and it’s going to effect 10 homes or more in some cases.  Whereas a smaller builder may only be building 1 to 4 homes at a given time.

So how do you find out if a builder is "good" or not?  Try to inspect the finished product, try to inspect the product as it’s being built.  Then you’ll know the work of the contractors.

Real Estate is Local, so is building.  One subdivision does not a builder’s reputation make.

Are you waiting till prices drop further?  I have two KEY questions for you.

1. When is the right time to buy?
2. When do you know where the bottom is?

I’ve gotten several questions from new buyers and other from my previous blog post about short sales that I’d thought I’d right a little something about Short Sales.

A short sale is what happens when the bank takes less then what they are owed.   For example,  a buyer buys a home for $150,000 in 2007.  Unfortunately, they lose their job in early 2008 and cannot pay their bills.  They try to work something out with the bank on their late payments and their account rep suggests a short sale (not usual).  From there they put the home on the market with a Realtor and get and negotiate a sale for $125,000.  They avoid foreclosure, eviction notices and investors knocking on the door at all hours… well maybe.

The real world isn’t so clean.

What has to happen in order for a bank to consider a short sale:

• Some sort of hardship - job loss, death in the family, medical bills (KEY: MUST BE DOCUMENTED HARDSHIP)
• Must be "upside down" and owe more than the home is worth when sold through a Realtor

Some things that will absolutely help you if you are in this situation:

• Go look and get approved for an apartment or rental immediately
• Keep all documents for eveything as soon you know you’re falling into foreclosure
• Don’t be fooled, filing bankruptcy can help you stay in the home longer but won’t stop the foreclosure process.

Benefits of a short sale to owner

1. Get to stay in the home a little longer with no payments.
2. Some lenders look at it as slightly better than a foreclosure when purchasing another home.
3. Some banks will NOT make you sign a promissory note!
4. Avoid foreclosure process.

If you have any questions, feel free to comment or e-mail me.