Real Estate Blog

Real Estate Houses :The 6 Worst Types of Real Estate Investments | Real Estate University

admin — Tue, 07 May 2013 07:56:49 +0000

Here are a few things to think about and properties to avoid when you are ready to invest your hard-earned cash equity capital.

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As any experienced real estate investor will tell you, not all investment properties are created equal. Homes that might be perfect for a primary residence, for example, might not yield positive cash flows — and without positive cash flows, you’re losing money, not making it.

Here are a few things to think about and properties to avoid when you are ready to invest your hard-earned cash equity capital.

1. Anything that doesn’t generate rental income
These include second homes and land investments. Too many people invest in properties hoping that they will go up in value. But there is an opportunity cost to having money sit in real estate that doesn’t pay any income. Even if the property goes up in value, you’ve got to reconcile and account for all the money you would have earned if your money had instead been in the bank or in stocks and/or bonds.

2. Anything with negative cash flows
If you buy a “prize property” — such as a fancy downtown fancy condo, beach property or vacation rental — it’s probably going to be 20+ years before you get your first dime of positive cash flow. And that’s just no way to invest your hard-earned money. Pencil out any potential deal ahead of time, and buy properties that pay cash flow from day one — the moderately priced properties in non-prize areas.

3.Tenant-in-common (TIC) investments
These were popular from 2005 to 2007 as a way to diversify a portfolio without having to deal with the hassle of owning and managing real estate. But few people ever earned a dime because of all the costs and fees associated with the agreements.

4.Development deals
Development of land is extremely high risk. There are entitlement, construction and market pricing risks, plus countless others. These investments are best left to the extremely wealthy and experienced investors who can take the chance that they’ll never see their money again.

5.Condo-hotels, intervals & time-shares
These aren’t even investments. There’s no ability to predict cash flows, rental income or future value/sales prices. And they are very hard to resell and typically only at a fraction of the original cost.

6.Foreign real estate
You might be OK buying real estate in Canada or Britain – however don’t forget about the foreign currency risk — but foreign countries generally have different real estate laws, protections and fluctuating currencies, making these properties extremely high risk.

Leonard Baron, MBA, is America’s Real Estate Professor®. His unbiased, neutral and inexpensive “Real Estate Ownership, Investment and Due Diligence 101” textbook teaches real estate owners how to make smart and safe purchase decisions. He is a San Diego State University Lecturer, blogs at Zillow.com, and loves kicking the tires of a good piece of dirt! More at ProfessorBaron.com.

Source: Zillow

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Residential Real Estate :Housing Headlines | Real Estate Training

admin — Tue, 07 May 2013 07:56:49 +0000

Housing number of the week: 56%. That’s how far back to normal the market is, according to our monthly Barometer. Tight inventory held back existing home sales and but boosted new home sales: Home Sales Dip as Demand Outstrips Supply (USA Today) Home Builders Gain Leverage as

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Housing number of the week: 56%. That’s how far back to normal the market is, according to the monthly Trulia Barometer.

Question: Did you wait too long…is it too late for you to make 2013 your best year ever?

NO WAY! But, you must take action NOW. We can help..Request your FREE 1 on 1 Coaching Call with a Harris Real Estate University Coach NOW. Note: First 25 Agents Only.

Schedule my FREE Coaching Call NOW! <—-CLICK HERE

Tight inventory held back existing home sales and but boosted new home sales:

Next week: Case-Shiller home price index, along with the quarterly Census report on homeownership and vacancy rate. Plus the monthly jobs report on Friday. Lots of excitement for economists.

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Real Estate Online :4 Low Down Payment Loan Options Every Agent Should Know | Real Estate Coaching

admin — Tue, 07 May 2013 07:56:49 +0000

The U.S housing market is mending. With mortgage rates still south of 4 percent, the monthly carrying costs for owning a home rival the cost of rent in many U.S. cities. A home’s monthly payment, however, is just one part of the mortgage financing puzzle. Many buyers are worried

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The U.S housing market is mending. With mortgage rates still south of 4 percent, the monthly carrying costs for owning a home rival the cost of rent in many U.S. cities.

A home’s monthly payment, however, is just one part of the mortgage financing puzzle. Many buyers are worried that having limited funds for their first payment, the down payment, could keep them out of the game.

The good news: According to the National Association of REALTORS® Profile of Home Buyers and Sellers 2012, 73% of U.S. home buyers made a downpayment of 20% or less. Thankfully, for buyers like these, there are a host of low- and no-down payment mortgage options for qualified borrowers.

Here are a few every agent should know to help eliminate one of the top worries of today’s buyer prospects:

1. For home buyers with a down payment less than 20%
Putting less than 20 percent down on a home doesn’t relegate buyers to paying for potentially costly private mortgage insurance (PMI) — it hasn’t in more than a decade. This is because banks offer loans known as “second mortgages”, or junior liens.

A second mortgage is what its name implies. It’s a second loan made at the time of closing — often for a relatively small amount — which extends a buyer’s indebtedness.

As an example, a buyer with a fifteen percent down payment may give a first mortgage to the lender for 80 percent of the home’s purchase price; and also a second mortgage to the bank for 5 percent. Together, these loans finance 85% of the purchase price, with the buyer bringing 15% to closing.

Second mortgages are typically available in two varieties — a fixed-rate option known as a Home Equity Loan (HELOAN) and an interest-only, adjustable-rate option known as a Home Equity Line of Credit (HELOC). Home Equity Line of Credits are more common and are typically tied to Prime Rate, which is currently 3.25%.

In today’s mortgage market, buyers can find second mortgage financing for up to 90% of their home’s purchase price.

2. For home buyers with a down payment of less than 10%
For buyers with a down payment of less than 10 percent, the choice for a home loan gets more tricky. Yes, conventional financing is available via Fannie Mae and Freddie Mac to 95% loan-to-value (LTV), however, loans insured by the Federal Housing Administration (FHA) are a viable option as well.

The FHA itself does not make loans. Rather, it’s an insurer of mortgages offering mortgage lenders protection against default. So long as the loan meets the FHA minimum standards — a series of rules known as “guidelines” — the FHA will insure it against loss.

Among the FHA guidelines is the requirement that home buyers make a down payment of at least 3.5% against a home’s purchase price. For every 0,000, that amounts to ,500 due at closing.

However, as compared to conventional financing, the cost to insure an FHA mortgage is relatively high, requiring an upfront cost of 1.75 percent, plus an annual cost which ranges up to 1.55%, depending on the loan size and term (i.e. number of years).

Furthermore, unlike conventional mortgage insurance, beginning June 3, 2013, some FHA loans will require that annual mortgage insurance be paid for as long as the loan is “active”. Conventional mortgage insurance typically ends once a home’s LTV reaches 80%.

For this reason, home buyers making a down payment of between 5-10 percent should consider both FHA and conventional financing, and choose the program which suits best.

3. For home buyers with a down payment Of 3%
For buyers wishing to put less than 3.5% down on a purchase, there is a Fannie Mae Conventional 97 product.

Among low down payment mortgage programs, the Conventional 97 program is unique in that it allows a buyer’s down payment to come from either their own cash or gift funds entirely, and home buyer counseling is not required. It’s often less costly as compared to FHA financing, too, as a result of less-expensive mortgage insurance premiums.

Not all loans will meet the Conventional 97 program’s minimum standards, however. For example, the program is valid for 1-unit homes only, and loan sizes may not exceed 7,000, regardless of whether the property is in a designated ”high-cost area” such as San Francisco, California; Potomac, Maryland; and any one of New York City’s five boroughs.

The Conventional 97 program is valid for primary residences only.

4. For home buyers with A down payment Of 0%
Lastly, for qualified buyers, 100% financing programs remain available. These products are typically government-backed, and require that buyers meet some secondary standards beyond the typical mortgage underwriting guidelines, like special classes or counseling.

The two most common zero-down programs are the Department of Veteran’s Affairs VA loan, and the U.S. Department of Agriculture’s Rural Housing Loan. Both are previewed below.

VA Home Loans

VA home loans are available to qualified military personnel exclusively. Loans are available for up to 100% of a home’s purchase price, and have no mortgage insurance requirements whatsoever. Furthermore, because mortgage rates for VA loans are often low as compared to comparable conventional financing, VA loans can be a viable choice for military buyers putting down any amount less than 20 percent.

Homeowners with VA loans also benefit from access to the VA Streamline Refinance program — among the simplest, most-effective refinance programs available today.

USDA Home Loans

USDA mortgages make available 100% financing, too. To qualify, the subject home must be within a pre-approved USDA census tract, which includes many U.S. suburbs and exurbs; and the buyer must earn an income which does not exceed local norms. The USDA charges a small, annual mortgage insurance-like fee of 0.40%. For eligible home buyers, however, the effects of this cost are countered by ultra-low mortgage rates and the ability to buy a home with nothing down.

Lending hurdles aren’t as high as your clients think
For today’s home buyers, there are a multitude of low and no-down payment mortgage options. Use the above as a guide, and connect with your local lending expert to help match buyers with the programs that best suit their needs best.

STOP! Do you need listings NOW? Of course you do. Direct assignment pre-approved short sale listing leads emailed to you. Major lenders Chase, BofA, Wells. Become a Lender Preferred Short Sale Agent. FREE Short Sale Industry Event. Warning: First 700 agents only. Register now!

As the housing market expands via both first-time and repeat buyers, demand for homes will increase. Knowing today’s financing options can go along way toward converting your on- and offline real estate leads.

Quick Guide – Finding the Right Mortgage

Check local mortgage loan limits at The Mortgage Reports.

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Real Estate Properties :Real Estate Coaching | 30-Year Fixed Mortgage Rates Hover Near Historic Lows

admin — Tue, 07 May 2013 07:56:49 +0000

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.25 percent, the lowest rate since Jan. 15.

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Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.25 percent, down from 3.31 percent at this same time last week. This represents the lowest rate since Jan. 15.

The 30-year fixed mortgage rate hovered between 3.33 and 3.28 percent for the majority of the week before dropping to the current rate this morning.

“Mortgage rates saw little movement this week and continue to hover near historic lows,” said Erin Lantz, director of Zillow Mortgage Marketplace. “This coming week, we expect rates to remain unchanged unless Wednesday’s Federal Open Market Committee statement or Friday’s unemployment report offer unexpected news.”

Additionally, the 15-year fixed mortgage rate this morning was 2.49 percent, and for 5/1 ARMs, the rate was 2.24 percent.

What are the rates right now? Check Zillow Mortgage Marketplace for up-to-the-minute mortgage rates for your state.

*The weekly rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

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Real Estate Online :HAMPered Government Program Needs to be Scrapped

admin — Tue, 07 May 2013 07:56:49 +0000

The Home Affordable Modification Program (HAMP) has done a dismal job of helping underwater homeowners. The reason is NOT because we’re spending too little on homeowner-relief programs and spending too much rescuing financial institutions, as a blog post last week on MarketWatch

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From our friends over on Foreclosure radar:

The Home Affordable Modification Program (HAMP) has done a dismal job of helping underwater homeowners. The reason is NOT because we’re spending too little on homeowner-relief programs and spending too much rescuing financial institutions, as a blog post last week on MarketWatch titled “Modified mortgages show ‘alarming’ default trend” alleged last week. The reason HAMP is failing is because it completely misses the underlying problem facing the housing market — negative equity.

A typical HAMP loan modification is designed to lower monthly payments by cutting interest rates and extending terms, but does nothing to address negative equity. Mortgage terms are often extended from 30 years to 40 years, a solution that may be good for the banks, but is terrible for the underwater homeowners who get sentenced to a prison of debt for decades.

The HAMP program has initiated 2 million loan modifications since 2009, but 54 percent of them have been canceled, according to the April 24, 2013, Quarterly Report to Congress by the Office of the Special Inspector General for the Troubled Asset Relief Program (TARP). Worse still, the oldest HAMP permanent modifications from the third and fourth quarters of 2009 are re-defaulting at a rate of 46.1 percent and 39.1 percent, respectively. HAMP permanent modifications from 2010 also had high re-default rates ranging from 28.9 to 37.6 percent. Of the 862,279 homeowners who remained in a HAMP permanent modification, 312,000 homeowners re-defaulted as of March 31, 2013.

The report concludes that, “the number of homeowners who have re-defaulted on HAMP loans is increasing at an alarming rate,” and adds that the Treasury Department, is not sure why so many of the HAMP permanent modifications failed and proposes further study.

What I find “alarming” is the fact that Treasury officials either can’t see, or choose to ignore, the negative equity elephant in the middle of the room. Is it smart for homeowners who are 50 percent or more underwater on their mortgage balances to spend the next 40 years tunneling their way out of a negative equity prison one teaspoon at a time? A better choice may be a short sale or foreclosure and beginning the two- to five-year process of repairing credit.

STOP! Do you need listings NOW? Of course you do. Direct assignment pre-approved short sale listing leads emailed to you. Major lenders Chase, BofA, Wells. Become a Lender Preferred Short Sale Agent. FREE Short Sale Industry Event. Warning: First 700 agents only. Register now!

What will most likely happen is the Treasury will spend millions, if not billions, of taxpayer dollars trying to “fix” a failed program rather than have an intelligent discussion on how to address the negative-equity problem.

The lack of conversation is likely due to the size of the negative-equity problem. Using Federal Reserve Flow of Funds data, we estimate negative equity, or excess mortgage debt, to be in the neighborhood of -.5 trillion. Solutions to a problem of this magnitude are painful, and range from letting the foreclosure process work, accepting higher inflation or imposing higher taxes. Since the electorate and our elected officials are motivated by pleasure and not pain, it is unlikely the focus will shift to addressing the negative-equity problem anytime soon.

In the near term, however, scrapping the HAMP program entirely seems like a good idea. Spending more taxpayer dollars on studying why a flawed federal government refinance program isn’t working is throwing good money after bad.

What do you think?

Madeline Schnapp

Director of Economic Research

ForeclosureRadar.com

530-550-8801 x27

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Real Estate Houses :Drake Bell of Nickelodeon’s ‘Drake and Josh’ Lists Home, Faces Foreclosure

admin — Tue, 07 May 2013 07:56:49 +0000

The actor bought his vintage-style home in 2007 for .050 million and, according to property records, was issued a notice of default in 2012, , with ,238 in past payments due on the original loan.

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Television actor Drake Bell, who found fame among the teeny-bopper set with his role on Nickelodeon’s “Drake and Josh,” has listed his vintage-esque home in Los Angeles as a short sale for .4 million. According to the listing, the home is not only priced below what Bell paid in 2007, but the property is also in the midst of the foreclosure process, with an auction just around the corner.

After some bit roles on Nickelodeon, Bell landed the leading role on “Drake and Josh,” which followed two boys becoming stepbrothers. The show ran from 2004 through 2007 and picked up a few Kids’ Choice Awards. Bell bought his home in 2007 for .050 million and, according to property records, was issued a notice of default in 2012, with ,238 in past payments due on the original loan.

The home, located at 3356 Ley Dr, Los Angeles CA 90027, was built in 1929. Measuring 2,640 square feet, the home has 4 bedrooms, 4 baths and original detailing, including a rotunda entrance and coved ceilings.

Bell has pursued a career in music, as well as voiced Peter Parker on an animated Spider-Man series. He’s also a part of ABC’s reality show “Splash,” which pits stars in diving competitions.

Source: Zillow

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Real Estate Properties :HREU Daily Motivational Podcast 05.01 | Real Estate Coaching

admin — Tue, 07 May 2013 07:56:48 +0000

Harris Real Estate University Daily Motivational Message. Listen in as Tim and Julie Harris share ways for top agents around the world to stay motivated everyday.

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Harris Real Estate University Daily Motivational Message. Listen in as Tim and Julie Harris share ways for top agents around the world to stay motivated everyday.

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Real Estate Properties :No Homes For Sale? How-To Create Your Own Inventory NOW!

admin — Tue, 07 May 2013 07:56:48 +0000

Across the country there is a common problem…not enough homes for sale…No Inventory. HARRIS REAL ESTATE UNIVERSITY has the solution: How to Create Inventory When it Seems Like There’s Nothing to Sell! First, lets have a little be-honest. Are you making any of these common

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Across the country there is a common problem…not enough homes for sale…No Inventory.

HARRIS REAL ESTATE UNIVERSITY has the solution:

How to Create Inventory When it Seems Like There’s Nothing to Sell!

First, lets have a little be-honest. Are you making any of these common buyer mistakes?

It’s not the buyers job to find a property to buy…thats YOUR job! Don’t wait for the buyer to email you what they want. Are you looking daily for homes that meet the buyer’s needs? Are you telling your buyers that you are actively looking for them? (If not, they may fire you!)
Be the FIRST one to see new inventory. Monitor your hot sheet and be ready to pounce.
Recognize that not all homes that sell are sold through the MLS. Many homes are being sold inner-office etc. In this market the listing agent has the power. Don’t be surprised when the listing agents attempt to pre-market their listings in an effort to double end the sale. Your mission is to ‘romance’ all the local listing agents so they will share with you their ‘pre-listings’ or if they are REO agents their homes in ‘pre-marketing’.

IMPORTANT: Its CRITICAL that you understand that buyers want to buy a home. They don’t want to spend endless afternoons with you. Most buyers will fire their buyers agent if that agent hasn’t sold them after only 2 weeks or having shown them 10 homes. The clock IS ticking!

HREU Create Your OWN Inventory NOW Plan:

Secret: Don’t just choose one or two of these Listing-Producing methods. Do all of them, getting yourself into listing abundance and away from listing scarcity!

NOTE: NONE of these ideas cost a dime. Anyone (and everyone) should pick at least 3 of these ideas and implement NOW.

1. New Construction: It’s almost never listed in the MLS. Find what’s being build by looking in your local weekend newspaper and actually visit all the models. Start a file called ‘New Construction’ and know the inventory! Know the price range, area, spec homes, builder perks and special financing. Become friends with new build reps…they can be a great source of resale referrals.

2. Centers of Influence and Past Clients: Communicate regularly with your own past clients and center of influence contacts so you have your OWN pocket listings. Those are your personal ‘shadow inventory’. Offer free CMAs for purposes of property tax assessment revisions.

3. “WANTED” ads. For your well qualified, highly motivated buyers, run specific ads, which describe their needs and target the exact neighborhoods they are looking for. HREU Students, Use the HREU sample ads.

4. Zillow.com ‘Make Me Move’: These are homeowners who have gone to Zillow and created their home’s profile, updated the information and actually stated the price they want. Before you criticize their higher price, realize their stated price could be what they OWE…and may make them a great Short Sale candidate. Use PrinterBees.com door hangers, postcards, etc., or simply door knock the prospects.

STOP! Do you need listings NOW? Of course you do. Direct assignment pre-approved short sale listing leads emailed to you. Major lenders Chase, BofA, Wells. Become a Lender Preferred Short Sale Agent. FREE Short Sale Industry Event. Warning: First 700 agents only. Register now!

5. Zillow.com ‘Pre-Foreclosure’: (We suggest Zillow because they don’t charge for this information.)When you do this you will get the exact addresses of homeowners who are already in pre-foreclosure. HINT: Sign up for a free account and you’ll see the exact address instead of just the street. Again, use PrinterBees.com door hangers, postcards, or just door knock.

Secret: Use the HREU Buyer Pre-qualification Script. Asking the right questions at the right time will root out the buyers who also have homes to sell!

6. EXPIRED Listings: New exprieds, old expireds. Call them ALL. You know they wanted to sell their home at one point in time. Check the Withdrawns as well.

7. FSBOs (for sale by owners): FSBOs are crying for help with a ‘help wanted’ sign (aka their FSBO yard sign) and a PHONE NUMBER.

8. Professional Networking. More than ever the listing agents control the market. Network with the listing agents. Note: If you have yet to become a powerful listing agent you absolutely MUST learn this skill. Request your free coaching call using NOW to get started. Don’t forget professional non-real estate networking like..BNI, BBB, Chamber of Commerce, Charity Events, MeetUp.com. Go to 3 events per week so you are known as the go-to person for all things Real Estate!

9. Professional Listing Referrals. Register with the listing referral companies like Dignified Transition Solutions (Dave Ramsey, etc) so you are an insider like our ASD students are. Hint: Enroll in HREU and become a HREU Lender Preferred Agent.

10. For Rent By Owners: Call all For Rent By Owners in your area, using the paper, Craig’s List and classified ads to find them. Simply ask if they have considered selling the home versus keeping it as a rental. Hint: Many will have NO CLUE what their home is worth in this market. When they learn their home us worth more than they think…listing for you!

11. REO Listing Agents: REO Listing agents know what they will be listing often MONTHS before the home is officially for sale. Ask to be notified of their ‘pocket listings’, ‘pre- marketing REOs’, etc. Hint: Hunt the pre-foreclosures. Don’t think for a second there aren’t any pre-foreclosures in your market. MILLIONS of owners are still underwater. Some estimates out that number as high as 14,000,000!

Smart Tip: Become a REO listing agent! Watch this video to learn how.

12. Investors: Work with investors and run ads that say ‘We pay cash for homes’. These sorts of ads will generate very motivated seller calls. HREU Students, use the sample HREU ads.

13. Move Up Buyers (who have homes to sell!): Run ads for ‘move up’ type listings…the type of homes that first time home sellers will move TO, so you can then list the home they’re coming from. Borrow other agent’s listings if necessary! Hint: Borrow listings from other agents if you don’t have any or your listings aren’t what move-up buyers are looking for.

14. Use Call- Capture technology: Utilize www.1800HomeHotline.com in your paper, on postcards and door hangers. This works best with WANTED ads; free CMA offers and with Pre-Foreclosure prospects to discuss their options. Hint: Use the HREU Scripts and sample ads.

Secret: Using www.1800HomeHotline.com for your main phone number on ANY type of marketing will increase your incoming calls exponentially! Agents who use this system usually sell their own listings, have more homes in their own listing inventory and do more transactions.

15. BPOs: Broker Price Opinions are a gold mine. Ask the owners WHY you are doing the BPO. Chances are they are thinking about doing a short sale and the bank has order the BPO to establish value. List the home! Hint: BPOs you did months ago…wanna bet they are ready to list now?

16. Property Tax Re-Assessments: (Mentioned before, worth mentioning again!) Offer CMAs and how-to information for helping owners have their property taxes re-assessed.

BONUS: In many parts of the US banks have NOT been filing NODs (Notice of Defaults) even after the sellers have missed MONTHs of payments. In some cases they aren’t even reporting the missed payments on the defaulting owners credit! That is ALL changing now. We are hearing from across the US that the banks are no FINALLY sending the NOD notices to owners who in some cases haven’t made payments for years. When the seller gets this notice they are often times very motivated to sell the home via a short sale vs losing the home as a foreclosure. Bottom line, the ice is thawing and the listings (REOs) are coming!

Copyright 2013 Harris Real Estate University

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Real Estate Houses :HREU Daily Motivational Podcast 05.02

admin — Tue, 07 May 2013 07:56:48 +0000

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Real Estate Properties :3 Buyer Mindset Quirks that Could Kill the Deal

admin — Tue, 07 May 2013 07:56:48 +0000

Whether a given oddity of humanity is good or bad often depends on the context. For example, one of the best advertisements I’ve ever seen was a mortgage company billboard that read simply: Surprises Are For Birthday Parties. Implied: surprise parties are fun, but surprises

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Excellent article from our friends at Trulia:

Whether a given oddity of humanity is good or bad often depends on the context. For example, one of the best advertisements I’ve ever seen was a mortgage company billboard that read simply: Surprises Are For Birthday Parties. Implied: surprise parties are fun, but surprises during underwriting? Not so much.

It is much the same with the little thought processes and mindset quirks that make each of us who we are. Quirks can be sweet, funny, endearing, or mildly irritating in the context of how we live out our everyday lives – our habitual path through the grocery store, or our unique way of getting dressed (hat first, socks last). But in the context of a real estate deal, there are a handful of buyer mindset quirks that are actually potential deal-killers.

STOP! Do you need listings NOW? Of course you do. Direct assignment pre-approved short sale listing leads emailed to you. Major lenders Chase, BofA, Wells. Become a Lender Preferred Short Sale Agent. FREE Short Sale Industry Event. Warning: First 700 agents only. Register now!

Even in today’s hot market, you might run into a buyer with one of these deal-spoiling, self-sabotaging mindset quirks now and again. Hopefully this will help you recognize and engage in some intense mindset management, before the quirks manage to ruin your buyer’s ownership vision and thwart your efforts to help them achieve it.

1. Sudden-onset frugality.
This happens with buyers who show up to every house hunt dripping in designer logos from head to toe; can’t meet with you without pulling out the latest smartphone, tablet, laptop and digital pen; attend every restaurant opening in town and take every opportunity to travel the seven seas.

These people are uber-consumers – they know their way around a purchase. Yet when it comes to making the largest, most important purchase of their lives, they somehow, suddenly get cheap!

And I’m not talking about a buyer who takes their time to make an offer decision, is deliberate about doing the research or asks questions and runs spreadsheets to understand the comparables.

I’m talking about those buyers who make a unilateral decision that they are going to spend no more than 0,000 on a home, and that they require a remodeled Victorian in the best school district in town, with 5 bedrooms, 3 baths and a Great Dane-able backyard – period – despite the fact that such a home will likely cost over 0,000. This is the buyer that insists that they’ll find this house at this price, no matter what the comps say; the buyer who saw The War of the Roses and thinks they’ll find one little old deceased lady’s family who will sell them their home for a song.

And these are not buyers who aim to scrimp on their housing costs because they can’t afford to spend 0,000, or because they’re hoping to save up for a worthy goal like their kids’ education or retirement savings – this sudden burst of frugality is motivated by the fact that they want to continue to be able to spend scads of cash on their consumer purchases, travel, dinners and fun.

In all fairness, lots of buyers start out like this, but realize quickly that to be successful at buying a home, they’ll have to reality check themselves and get in the market in earnest. Sometimes this shift happens after several viewings, tours, or even after losing a home or two. But if you have a buyer who is spendy in every other area of life, has flush financials and simply refuses to conform their expectations to the reality of the market, you might have a case of Sudden-Onset Frugality on your hands.

2. Panic-based paralysis.
Panic is a powerful emotional state. In the context of a real estate transaction, panic often arises when:

In becoming the trusted advisor of a buyer who is Committed to Consensus, you might find yourself giving them input that opposes your immediate financial interests but serves their long-term lifestyle and financial interests. This will help these types of buyers grow comfortable looking to you, the expert, for advice – versus seeking their advice from the peanut gallery.

In a market like today’s, helping buyers avoid self-sabotage becomes a major part of the job. These are three common deal-killing quirks I’ve witnessed first hand. Which ones would you add to the list?

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