5 Steps to Win the Negotiation Battle

5 Steps to Win the Negotiation Battle

RECBL - Real Estate News

We’ve all been there. Whether it’s negotiating a deal, a repair request or price, both sides are at an impasse. What’s your next step?

Agents recall themselves being in this situation many times, and have been tempted to simply kill the deal. But ultimately, the goal is to put the client’s interests ahead of our own interests and feelings and to create a win-win-win scenario. Are you capable of doing this, or does your temper get the best of you?

To make sure you can avoid the loss of temper and ultimately the deal, here are five ways to win your next negotiation.

1. Take a deep breath and walk away from the computer or phone and change your mind set. Get back on the phone or send an email asking the other agent what would make the deal work for his or her clients. This change in mindset may be enough to win your way into working out the deal.

2. Consider being a bit more transparent to the other agent. The conversation may go something like this: "I wanted to open up and let you know that this is a tough one for me. My buyers/sellers see things a little differently, and I’m simply trying to live up to their expectations. Can you help me out?" By telegraphing the fact that you’re being transparent and not giving away too much information, you may shift the negotiations back into your favor.

3. Try to get into the other agents head by asking for their thoughts. A perfect example is a deal I’m currently working on. We have an appraisal problem, and there’s a difference of $23,000 between the contract price and appraisal. I had a heart-to-heart with the buyer’s agent and found out that his buyer agrees with the contract price, but doesn’t have the money to come up with the difference. I also learned that the buyer is a widower and has four kids. That gave me enough information to go back to my seller and explain what the buyer is up against. They’re considering a price drop of $10,000 in an effort to meet the buyer halfway.

4. In a tough deal with an agent you’ve never worked with, your goal should be to create the same feeling you get when working with a friend or agent you’ve had a good cross-sale experience with. How? Social media. The goal is to learn as much about the other agent as possible. Maybe you have friends in common or attend similar types of social events. Making a connection like you would with the client could help you win the negotiation.

5. Slow the negotiations down. Instead of getting back to the other agent in an hour, wait until the next day (unless you’re under deadline). This helps keep the momentum on your side and timetable. It may not mean much to you, but if you tell your client what you’re doing and prepare them for the slowdown, the other side is caught off guard. The other agent may not care or have a clue what’s going on, but the other agent’s client may start having second thoughts. It may be enough to move the other agent’s client to a different position.

Bob Sokoler is the owner of a team in Louisville, Ky., which has ranked No. 1 in the city for sales volume six years in a row. His team sold more than 404 properties in 2016, and more than 340 properties in 2015. Contact him at Bob@WeSellLouisville.com.

For more information, please visit www.workmansuccesssystems.com.

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Existing-Home Sales Bloom After Rainy April

Existing-Home Sales Bloom After Rainy April

Existing-home sales bloomed in May after a rainy April, with the median days on market at a new low and the median sales price at a new high, the National Association of REALTORS(R) (NAR) reports.

Existing-home sales totaled 5.62 million, a 1.1 percent increase from April and a 2.7 percent increase from one year prior. Inventory increased 2.1 percent to 1.96 million-though still 8.4 percent below one year prior.

"The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level," says Lawrence Yun, chief economist at NAR.

"Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher."

Inventory is currently at a 4.2-month supply. Existing homes averaged 27 days on market in May, two fewer days than in April and five fewer days than one year prior. Non-distressed homes took 27 days to sell. All told, 55 percent of homes sold in May were on the market for less than one month.

"The bottom line is that there are fewer homes on the market, and they are selling faster," says Joseph Kirchner, senior economist at realtor.com(R). "Tightening supplies have caused steady price growth in the existing-home market; sales are up 2.7 percent since May 2016. In fact, the supply of homes on the market fell from 4.7 months worth last May to 4.2 months last month.

"With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month," Yun says.

"This is a strong market for sellers, which is good news for people who are downsizing or settling an estate," Kirchner says. "It’s bad news for millennials, first-time buyers or second-time buyers looking to upsize for that baby on the way."

The metropolitan areas with the fewest days on market in May, according to data from realtor.com, were Seattle-Tacoma Bellevue, Wash. (20 days); San Francisco-Oakland-Hayward, Calif. (24 days); San Jose-Sunnyvale-Santa Clara, Calif. (25 days); and Salt Lake City, Utah, and Ogden-Clearfield, Utah (both at 26 days).

The median existing-home price for all types of houses (single-family, condo, co-op and townhome), at the same time, was $252,800-a 5.8 percent increase from one year prior. The median price for a single-family existing home was $254,600, while the median price for an existing condo was $238,700.

"Home prices keep chugging along at a pace that is not sustainable in the long run," says Yun. "Current demand levels indicate sales should be stronger, but its clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions."

Single-family existing-home sales came in at 4.98 million in May, a 1 percent increase from 4.93 million in April and a 2.7 percent increase from 4.85 million one year prior. Existing condo and co-op sales came in at 640,000, a 1.6 percent increase from April and a 3.2 percent increase from one year prior.

Twenty-two percent of existing-home sales in May were all-cash, with 16 percent by individual investors. Five percent were distressed.

Existing-home sales in the Northeast rose 6.8 percent to 780,000, with a median price of $281,300. Existing-home sales in the West rose, as well, 3.4 percent to 1.22 million, with a median price of $368,800. Existing-home sales in the South also rose, 2.2 percent to 2.34 million, with a median price of $221,900. Existing-home sales in the
Midwest fell 5.9 percent to 1.28 million, with a median price of $203,900.

For more information, please visit www.nar.realtor.




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5 TIPS FOR BUYING FORECLOSED HOMES

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Despite increases in home prices and a stabilizing housing market, many experts say the foreclosure crisis is far from over. But buying a foreclosed home is different from buying a typical resale. In many cases: 

• Only one real estate agent is involved.
• The seller wants a preapproval letter from a lender before accepting an offer.
• There is little, if any, room for negotiation.The home comes as-is, and it's up to the buyer to pay for repairs.

On the upside, most bank-owned homes are vacant, which can speed up the process of moving in.

"Buying a foreclosure is definitely a bit of a grind. It's not easy," says Robert Jensen, a broker in Las Vegas. "You're getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want."​

Get a Broker and Lender

The first two steps in buying a foreclosure should happen almost simultaneously: Find a real estate broker who works directly with banks that own foreclosed homes and get a pre-approval from a lender.  Elaine Zimmerman, a real estate investor and author, recommends that shoppers first visit any site with a database of foreclosed homes. You also could look at a local real estate website that lets you filter the results to see only foreclosures. You might find the acronym REO, which means "real estate owned" (by a bank, that is). This signifies that a home has been through foreclosure and the lender is selling it.

Get a Broker on Your Side

The goal of combing through foreclosure listings is not to find a house; it's to find an agent. Banks usually hire a few real estate brokers to handle their REO properties in a market. In a lot of cases, the buyer works directly with the bank's broker instead of using a buyer's agent. That way, the commission doesn't have to be split between two brokers.

"A lot of these REALTORS(R) have a long-term relationship with these banks, and they know of listings that haven't even come on the list yet," Zimmerman says. "Call them about the listings that you're interested in, but also ask them about listings that may be coming up because sometimes it may take a day or two or even a week before a listing actually comes onto the database."  In places where thousands of foreclosed properties are for sale, you might not get much one-on-one attention from overloaded agents. To prove that you're serious about buying, says Jensen, "right before or after you meet with the agent, meet with the lender."

Get a Pre-approval Letter

Unless you plan to pay cash, you'll need a recent pre-approval letter from a lender. The letter will describe how much money you can borrow, based upon the lender's assessment of your credit score and income.

"The problem is, buyers want to find the house first, and then they think they'll work out the financing," Jensen says. "But the problem is, the really good deals on these bank-owned, they go quick-and the buyer doesn't necessarily have time to try to work out the financing afterward. They need to work that out first." Zimmerman says some first-time buyers make the mistake of assuming that the bank selling the home will also finance the mortgage as part of the deal. "Don't expect to get financing from the bank that foreclosed on it," she says. "That's a totally separate transaction, and they view it that way. The people in the (bank's) REO department are not loan officers. They are getting rid of bad assets."

Pricing Depends on Sales Pace 

There's no rule of thumb on what the bank's bottom line is on price. Just as with any other real estate purchase, you have to look at the recent sales prices of comparable properties, or "comps."

Jensen says: "You really have to look at the comps in today's current market conditions and write a competitive offer based on that. Sometimes the bank prices the homes really low, and the home will have multiple offers over list price within hours. Sometimes it's priced too high, and you can come in lower. A lot of times, buyers will come to me and say, 'We want to write offers for half price.' It just doesn't work that way."

​Don’t Expect a Repair Discount

Keep in mind that foreclosed houses generally are sold as-is. Jensen says: "Let's say the house is listed for $200,000, all the comps are $200,000, and so the client comes in and said, 'Hey, look, I want to buy this house but I've got to do paint, carpet and fix some mold damage, so I want to take $15,000 off the price.' You know what? All the other ones were in the same condition, and they sold for $200,000."

Jensen further counsels to look at the "absorption rate for your product class." That means you should find out how quickly comparable houses are selling. In foreclosure, a 3,500-square-foot house with a pool in a gated community might sell within days or hours, whereas more modest homes might sit on the market for weeks.

If homes in your product class are selling swiftly, "the best advice on a bank-owned property is to come in at your highest and best, unless the property has been sitting on the market forever with no activity," Jensen says. "If you're going to be upset because you would have gone $5,000 more, but you lost the property, just bid the higher price in the first place."

Jensen and Zimmerman recommend getting to know trades people who can assess and repair damage from pests, mold and leaks.
(C)2016 Bankrate.com
 Distributed by Tribune Content Agency, LLC

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PENDING HOME SALES HIT LOWEST LEVEL SINCE JANUARY

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After bouncing back in July, pending home sales cooled in August for the third time in four months and to their lowest level since January, according to the National Association of REALTORS(R).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, declined 2.4 percent to 108.5 in August from a downwardly revised 111.2 in July and is now slightly lower (0.2 percent) than August 2015 (108.7). With last month's decline, the index is now at its second lowest reading this year after January (105.4).

Lawrence Yun, NAR chief economist, says suffering supply levels have taken the wind out of the momentum the housing market experienced earlier this year. "Contract activity slackened throughout the country in August except for in the Northeast, where higher inventory totals are giving home shoppers greater options and better success signing a contract," he says. "In most other areas, an increased number of prospective buyers appear to be either wavering at the steeper home prices pushed up by inventory shortages or disheartened by the competition for the miniscule number of affordable listings."

According to Yun, evidence is piling up that without more new home construction, the current housing recovery could stall. Housing inventory has declined year-over-year for 15 straight months; properties in August typically sold 11 days quicker than in August 2015, and after increasing 5.1 percent last month, existing-home prices have risen year-over-year for 54 consecutive months.

"There will be an expected seasonal decline in new listings in coming months, which could accelerate price appreciation and make finding an affordable home even more of a struggle for would-be buyers," adds Yun.

Earlier this month, NAR released a new study that revealed single-family home construction is not keeping pace with job creation and is lacking overall in 80 percent of measured metro areas. When combined with the scant supply levels for existing homes, these tight inventory conditions continue to hamper affordability in many of the largest cities in the country-especially those in the West.

"Given the current conditions, there's not much room for sales to march again towards June's peak cyclical sales pace," says Yun.

Following last month's decline, Yun expects existing-home sales in 2016 to be around 5.36 million, a 2.1 percent increase from 2015 and the highest annual pace since 2006 (6.48 million). The national median existing-home price growth is forecast this year to rise around 4 percent.

The PHSI in the Northeast rose 1.3 percent to 98.1 in August, and is now 5.9 percent above a year ago. In the Midwest the index decreased 0.9 percent to 104.7 in August, and is now 1.7 percent lower than August 2015.

Pending home sales in the South declined 3.2 percent to an index of 119.8 in August and are now 1.5 percent lower than last August. The index in the West fell 5.3 percent in August to 102.8, and is now 0.6 percent lower than a year ago.

For more information, visit www.realtor.org.

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Real Estate Cash Buyers Lists For Real Estate Sales

Real Estate Cash Buyers Lists For Real Estate Sales, CASHBUYERSLISTS.COM

Real Estate Cash Buyers Lists For Real Estate Sales

What are real estate cash buyers? Real estate cash buyers are individuals or entities who have made real estate purchases with cash for real estate deals.

Find Real Estate Cash Buyers today.  CashBuyersLists.com

www.CashBuyersLists.com maintains a growing database of real estate cash buyers or real estate investors.

Cash buyers are typically real estate renovators, rehabbers and/or wholesalers, who have the capital or access to private funding to purchase properties without conventional financing. 

The entities of the real estate cash buyers lists we maintain do not need to get qualified for financing to close on a deal.

Real estate cash buyers can close quickly once title work is done because they offer all cash for their real estate deals and understand real estate acquisition is faster with cash.

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HOME FLIPPING HITS SIX-YEAR HIGH

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A total of 51,434 U.S. single family home and condo sales were completed flips in the second quarter of 2016, according to a new RealtyTrac Q2 2016 U.S. Home Flipping Report. These numbers are up 14 percent from the previous quarter and up 3 percent from a year ago to the highest number of home flips since Q2 2010-a six-year high.

For the report, a home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by ATTOM Data Solutions in more than 950 counties accounting for more than 80 percent of the U.S. Population.

Homes flipped in Q2 2016 accounted for 5.5 percent of all single family and condo sales during the quarter, down from 6.7 percent of all sales in the first quarter but up from 5.4 percent of all sales in Q2 2015.

A total of 39,775 investors (including both individuals and institutions) completed at least one home flip in Q2 2016, the highest number of home flippers since Q2 2007-a nine-year high.

"Home flipping is becoming more accessible for smaller operators thanks to an increasingly competitive lending environment with more loan options for real estate investors, who are also benefitting from the historically low mortgage interest rates," says Daren Blomquist, senior vice president at ATTOM Data Solutions. "That favorable lending environment for flippers has helped to fuel the recent flipping frenzy we've seen over the past five quarters.

"We're starting to see home flipping hit some milestones not seen since prior to the financial crisis, which is somewhat concerning, but there are a couple of important differences in the home flipping of 2016 compared to 2006 when home flipping peaked during the last housing boom," Blomquist continues. "First, home flippers are realizing a much bigger gross ROI in 2016, averaging 49 percent in the first two quarters compared to an average gross ROI of just 27 percent in 2006. Second, while an increasing number of flippers are financing their purchases, more than two-thirds are still using cash to purchase compared to about one-third using cash to purchase back in 2006." 

Of the 51,434 homes flipped in the second quarter, 68.3 percent were purchased with cash by the flipper, down from 71.1 percent in the previous quarter and down from 69.6 percent in Q2 2015 to the lowest level since Q3 2008-a nearly eight-year low.

"The single family real estate sector is becoming more institutional, which means that more financing is available and more attractive," says Varun V. Pathria, CEO at Asset Avenue, a company that provides investor rehab, bridge and rental loans. "The entrepreneurs are also becoming savvier and as a result are looking to leverage their capital more. There continues to be a fringe group of people who enter and exit the sector based upon opportunity and those people are hard to predict but generally look to take maximum leverage."

Pathria noted that 79 percent of the rehab loans Asset Avenue has originated so far in 2016 have been purchase loans while the remaining 21 percent have been refinance-typically an investor who purchases with cash at a foreclosure auction or some other auction and subsequently finances the property.

Gross Flipping Profit Increases to New All-Time High
Homes flipped in Q2 2016 sold on average for $189,000, $62,000 more than the average purchase price of $127,000, according to ATTOM data. That $62,000 average gross profit was up from an average $59,250 gross flipping profit in the previous quarter and up from an average $57,900 gross flipping profit in Q2 2015 to the highest average gross flipping profit since Q1 2000, the earliest quarter tracked in the report.

The average loan amount for rehab loans originated by AssetAvenue so far in 2016 was $193,786, according to CEO Pathria.

The $62,000 average gross flipping profit represented an average 48.8 percent return on the original purchase price, down from a 49.3 percent average gross flipping ROI in the previous quarter but up from a 47.5 percent average gross flipping ROI in Q2 2015.

Average Days to Flip at 10-Year High
Homes flipped in Q2 2016 took an average of 185 days to flip, up from 180 days from the previous quarter and up from 182 days in Q2 2015 to the highest level since Q2 2006-a 10-year high.

Among 100 metropolitan statistical areas with at least 90 home flips in Q2 2016, those with the longest average time to flip were Ogden-Clearfield, Utah (229 days); Naples, Fla. (222 days); Punta Gorda, Fla. (212 days); Palm Bay-Melbourne-Titusville, Fla. (206 days); and Pensacola, Fla. (206 days).

Markets with Highest Home Flipping Rate
Among 100 metropolitan statistical areas with at least 90 homes flipped in Q2 2016, those with the highest flipping rate were Memphis (11.1 percent); Visalia-Porterville, Calif. (10.1 percent), Tampa (10.0 percent); York-Hanover, Penn. (9.7 percent); and Mobile, Ala. (9.6 percent).

Other metro areas in the top 10 for the highest flipping rate in Q2 2016 were Fresno, Calif. (9.5 percent); Lakeland-Winter Haven, Fla. (9.5 percent); Deltona-Daytona Beach-Ormond Beach, Fla. (9.4 percent); and Clarksville, Tenn. (9.3 percent).

Along with Memphis and Tampa, major markets with a population of at least 1 million where the Q2 2016 flipping rate was above 7 percent were Miami, Orlando, Baltimore, New Orleans, Phoenix, Jacksonville, Florida, Nashville, and Las Vegas.

Markets with Highest Gross Flipping Profits
Among the 100 metropolitan statistical areas with at least 90 home flips in Q2 2016, those with the highest gross ROI for homes flipped in Q2 2016 were Pittsburgh (133.3 percent), Allentown, Pa. (117.9 percent); New Orleans (111.5 percent); Cleveland (102.6 percent); and Philadelphia (98.9 percent).

There were nine metro areas where the average gross flipping profit in Q2 2016 was more than $100,000: San Jose, Calif. ($161,000); San Francisco ($146,000); Los Angeles ($125,000); New York ($124,160); San Diego ($111,250); Oxnard-Thousand Oaks-Ventura, Calif. ($110,000); Baltimore ($105,000); Washington, D.C. ($104,500); and Seattle ($102,900).

Thirty-five percent of all homes flipped in Q2 2016 were sold by the flipper for between $100,000 and $200,000, the biggest share of any price range, but the biggest year-over-year increase in terms of price range was homes flipped in the $200,000 to $300,000 range-up 10 percent from a year ago.

Homes flipped for more than $5 million yielded the highest average gross ROI (73 percent), followed by the $50,000 to $100,000 price range (58 percent) and the $100,000 to $200,000 price range (58 percent).

Homes that were flipped in Q2 2016 were purchased by the flipper at a 25.7 percent discount below full "after repair" market value on average and sold by the flipper for a 9.2 percent premium above market value on average.

For more information, visit www.attomdata.com and www.RealtyTrac.com.

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FAVORABLE LENDING STANDARDS, LOW RATES TO LIFT HOUSING THROUGH 2016

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A recently released forecast expects the economy to regain ground through the remainder of the year, boding well for the housing market in the months to come. According to Fannie Mae's Economic & Strategic Research Group's recent 2016 Economic and Housing Outlook, the economy is on track to grow 1.8 percent this year, boosted by an improving employment landscape and higher levels of consumer spending-both of which will give lift to housing.

"Housing market fundamentals remain a mixed bag," Doug Duncan, Fannie Mae's chief economist, explained in a statement about the Outlook. "During the second quarter of 2016, both new- and existing-home sales rose to expansion highs, while single-family starts pulled back, remaining historically low for an expansion.

"Tight housing inventory from a lack of new construction continues to create affordability challenges, particularly at the lower end of the market," Duncan continued. "Robust rental demand during the second quarter of the year has created the lowest rental vacancy rate in decades. In addition, the homeownership rate dropped to below 63 percent in the second quarter, but we are seeing some tentative signs of older millennials moving toward homeownership.

"We expect homebuyers will benefit from improving job and wage growth, more favorable lending standards, and continued low mortgage rates through the rest of the year, with the 30-year fixed-rate mortgage rate projected to average 3.4 percent during the fourth quarter."

Source: Fannie Mae

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