May 052016

067There are two real estate continuing education courses coming up next week… and one is for the first time ever!

May 12, Thursday, 9:00 a.m. — 12:00 p.m.
Market Analysis—More Than a Price**

What does it mean to complete a market analysis? In this course, we’ll look at the types of analysis that deal with more than a price. You’ll discover some untapped resources and ideas for developing more than a boilerplate marketing plan. This course is approved for 3 clock hours of continuing education by the Maine Real Estate Commission.

May 12, Thursday, 1:00 p.m. — 4:00 p.m.
Transaction Troubleshooting*

Every transaction has issues that crop up at some point. How do effective licensees handle these issues? What are the Licensee’s duties and opportunities in helping solve problems that arise? Can some of these issues be avoided in the first place? These and many more questions will be answered during this lively course. Topics will include clauses in a purchase and sale agreement, stigmatized property, handling of offers and counter offers, due diligence, earnest money deposits, and much more. This is an intermediate level course featuring lots of class discussion and input. This course is approved for 3 clock hours of continuing education by the Maine Real Estate Commission.

Register for either or both courses by visiting the Arthur Gary School of Real Estate website or calling the school at 207 856-1712. Both courses will be held at the Ramada Inn on Odlin Road in Bangor.

The instructor instilled a level of confidence in his teaching due to experience with the subject matter. I felt extremely comfortable asking questions in relation to the material presented. I have experience teaching/instructing and receiving such in six years of college. I have no issue stating that this instructor is among the top three I have had.

Aug 302015

anxious_scared_figure_400_clr_8434According to a recent study by Redfin, buyer’s worries have changed slightly. Of course, that makes sense because we all know the market changes constantly. Last year (2014) buyers were most worried about inventory. This year “prices” are in the number one spot. Actually, the worry seems to be more about prices rising and affordability becoming an issue.

Some will suggest that reflects an improving market with good news for sellers. Others will suggest it buyers are showing a lack of confidence in the general economy.

According to the survey of 3,500 buyers, the top five worries this year are:

  1. Prices (prices are rising or too high)
  2. Competition from other buyers
  3. Inventory (there aren’t enough houses to choose from)
  4. Selling my current home first
  5. Having enough for a downpayment

You might find it interesting to compare that with the top five worries last year. It will not take too much creativity to support your current opinion of the state of the market and the direction it’s taking. But you’ll have to rationalize some things. For example, the fourth worry of buyers last year was that mortgage rates might rise before they could buy–that didn’t make the list this year. Another concern last year that didn’t make the list for 2015 was “fatigue” — referring to buyers finding the process difficult and tiring.

Most know that all generalities are false. In this case, that’s especially true because “worries” are very personal. So while how those 3500 people felt is mildly interesting, real estate licensees should be much more focused on a much smaller number–the number of clients you are working with.

You want to know a lot about your client. Most of those things are basic and concrete. The questions you ask probably include things like, “What is your price range?” and “How many bedrooms?” and “How much land?”

Those are certainly important conversations. But why not ask “What are you worried about?” Some will say, “Nothing,” partly because they are overwhelmed with excitement and haven’t thought about the concerns. It might be tempting to accept that answer. But aren’t there some things a buyer should be worried about?

One of the saddest listings I ever took involved a couple in the middle of a divorce. The short version of their story was they visited Maine and fell in love with our great state. They spent the last few days of their vacation finding a real estate licensee and then a house. It was a very smooth and speedy transaction–their agent handled “everything” while they went home to pack. The realities started showing up after they were settled in their new home. One spouse was forced to return to their home state to find employment that wasn’t available in the vacation area they’d bought. The other found work, but it involved a long commute with resulting childcare and expense issues. Thus began the breakdown of the family. The home they purchased was not an “easy sell” so by the time they realized their mistake, the market was not in their favor.

A little “worrying” during the process might have made a world of difference in the outcome. Personally, I think the licensee who represented them in the purchase should have noticed there were some things they weren’t worried about and raised some of the issues they weren’t seeing.

Of course, licensees also find themselves representing worriers. Folks in the real estate business like to focus on “making it easy” and “getting to closing.” If that’s the case, remember that it’s easier to smooth the road if you locate the bumps and potholes. No matter how you cut it, a discussion of worries with clients (buyer or seller) just makes sense.

Jun 232015

067067I’ll be teaching this AGSRE Course at the Ramada Inn in Bangor on Tuesday, July 14 starting promptly at 5 p.m. For more information or to register you can visit the Arthur Gary School of Real Estate website or call 856-1712. (There are several other CE courses being offered earlier in the day.) Here’s the official course description:

Are you assisting sellers and buyers in pricing residential property only to have the appraisal come in low? If so, this is the course for you. This course goes over the restrictions placed on appraisers and the methods the appraiser uses in determining value. The closer the real estate licensee is to using the appraiser methodology, the more the likelihood the property will appraise after it is under contract. The class will discuss amounts to use for adjustments, which properties to use for comparables, presenting the CMA to your buyer and seller client, and much more. You will not want to miss this class. This cour067se is approved by the Maine Real Estate Commission for three clock hours of continuing education.

Jun 162015
Check out this resource!

Check out this resource!

I somewhat stumbled on to an interesting resource for real estate licensees this morning: The First Tuesday Journal. Let me quickly point out that this claims to be the “California real estate news source,” and, therefore much of the content is based on California law and practice. That said, there is enough general information to make this site useful, plus there can be some interesting comparisons to how things are done in Maine. (My bias is that just about anything that makes you think has value.)

There are some “FARM” templates that appear to be free for the downloading–and some of them are quite well done! Here’s a quote from one entitled, “How to gain an advantage when buying a home.”

Take an open house promenade. With the convenience of online browsing, fewer homebuyers are taking advantage of open houses. Visiting the home in person gives you the advantage of knowing exactly what you’re getting, instead of relying on stylized pictures and generic listing descriptions.

I use this particular example to demonstrate the need for caution when using material from the site. While there are no legal issues with this bit of advice, you might want to consider changing the word “promenade” (commonly used in California) to “tour” (commonly used in Maine).

This site is not recommended for sales agent students–my strong recommendation is those just getting started stay very focused on the “need to learn” material and avoid branching out into other resources. For others, you’ll want to use material from this site with caution, perhaps even to the point of reviewing anything you plan to use with your designated broker.

Jan 012015

Here’s some information from the Maine Real Estate Development Association:

stick_figure_graph_binocularsEach January, over 600 of the state’s leading real estate experts attend MEREDA’s TD Bank Sponsored Signature Event, the Annual Real Estate Forecast Conference. This annual event attracts hundreds from Maine’s real estate, construction, finance, architecture, legal, engineering, tourism, and economic development communities, the largest gathering of commercial real estate professionals in Maine.

MEREDA assembles some of Maine’s top real estate leaders to provide the annual Economic Overview and Outlook on Maine’s economy, which includes an examination of current State statistics and what they reveal about the future of Maine’s economy with an emphasis on real estate, along with the popular Market Overview by property type focusing on both Commercial and Residential Forecasts.  This unique forum is specifically geared toward developers, brokers, architects, bankers, attorneys, accountants and other industry professionals who will gain valuable insights on the state of the economy and what lies ahead in the coming months for the real estate industry.

For 2015, we look forward to welcoming highly experienced U.S. economic researcher and forecaster, Michael Dolega, Senior Economist at TD Economics, which supports all of the divisions of TD Bank Group, who will provide his outlook on Maine’s economy, and Maine’s Governor, Paul LePage will provide the Welcome Address.

This course has been approved for 4.00 hours of BROKER, LEGAL, APPRAISER & ARCHITECT Continuing Education Credits.

Supplementing the conference each year is MEREDA’s Annual Member Showcase with MEREDA Members exhibiting their products and services in front of the “who’s who” in commercial real estate.  The exhibition has become an integral part of our annual event providing a unique opportunity to network with MEREDA’s members.

For complete information visit the MEREDA site and check the events page.


Changes That Might Go Unnoticed?!

 Posted by at 12:48 pm
Aug 152013
carrying_house_pc_400_clr_4461A frequently asked question is “Are you still selling real estate?”

I occasionally joke in reply, “Not much!”

Let’s start with the observation that I remain licensed and “active” with the Mallett Real Estate agency. I am not, however, actively seeking clients or pursuing that business. (One reason I remain actively licensed is that I continue to teach licensing courses and believe that keeping some degree of involvement is necessary to remain an effective instructor.) I will continue to work with select clients.

I’ll admit I’ve also been a bit scattered with my interests–or at least it might appear so to the casual observer. Two significant changes in the past year are signing up as a substitute elementary school teacher and releasing my book. There is a pattern in this. I love to work with kids. Unfortunately, they don’t buy and sell much real estate.

Given this focus, one of the questions I am currently facing is “What to do with this site?” My other site (Brain Leaks and Musings) has been where I’ve historically featured my classes, courses, and writing. This site has focused on real estate from the consumer’s perspective.

My current thinking is to keep this site fundamentally the same, but tweak it a bit so that it also serves as a resource for students and alumni of real estate courses. I have always believed that well-informed consumers make the best clients, so if anything, the site may increase in value for those who are considering buying or selling real estate.

I’ll also probably distract folks with off-topic stuff occasionally!

Ironically, enrollments in real estate courses seem to be on the increase-some would say an indication of the business turning positive. One thing that would help the market is better informed licensees and consumers, so I will do my best to help!

As always, if you have questions or suggestions, please let me know.


Gram’s Moving In!

 Posted by at 8:24 am
Dec 052012

A recent article in Real Estate Economy Watch offers a wealth of statistical data supporting the observation that “Today’s housing depression has again forced generations to move in together, but as the housing recovery takes hold, many plan to stay together and revive the multi-generational lifestyle of the past.” The article also, quite naturally, focuses on how this changes the real estate market. At least one commenter notes that the “biggest upside” of the trend is “more housing for the money.”

I’m not sure I agree. I might agree if the analysis was that this trend means different housing for money. Too often, we view the world as one dimensional and in America, it’s all about the money most of the time.

When I am teaching people who are studying for a real estate license, I tell them the biggest mistake one can make after getting licensed is to start out “poor.” It’s a horrible basis on which to make decisions and one can discover him or herself chasing commissions instead of objectively counselling clients.

I think that advice applies across the board. A real estate buyer who posted about a “Catch-22” he’s caught in is clearly caught there in a large part because he doesn’t have the money required to complete a painless transaction. Even he sees an option of passing on the current purchase until he can save up some more money.

We shouldn’t–can’t really–ignore economic reality. But when we are thinking about living arrangements, we need to look beyond the economics. The personal and social impact of multi-generational living arrangements can be both positive and negative. Those impacts are something we can have some control over.

The Amish understand this with homes and farms where multi-generational living is the norm. (I would suggest you research “Gros Daddy Haus” except when I did, most of the references are to porn sites! That might say something about our society…) Actually, it’s more than a norm–it’s an expectation that is based on their larger definition of community and their tendency to carefully consider how changes will impact that and their way of life.

Given our economic environment, the likelihood of families facing these sorts of choices in clearly going to increase and in many cases “there won’t be a choice.” Even if you believe that, don’t just add up the dollars in the process–consider how that “forced” choice is going to impact you and your way of life. You aren’t just letting somebody move in with you, you are changing your way of life and with some forethought you can control the impact.

If, as the article suggests, you want to “stay together and revive the multi-generational lifestyle of the past,” understand that lifestyle isn’t something that just happens to you–it’s something you can consciously define and adopt.


No Worse Than…

 Posted by at 8:43 am
Oct 062012

“Remember, people will judge you by your actions, not your intentions. You may have a heart of gold – but so does a hard-boiled egg.”

 – Author Unknown

Having recently experienced a rather painful transaction and participated in the development of a course on buyer representation, I am not at all suprised by a study earlier this year that revealed that “Buyer Satisfaction with Real Estate Brokerage Companies Hits All-time Low.” You can read some highlights on the Real Estate Economy Watch website.

One of the things I found interesting about the analysis of the latest data (based on national data involving large companies) is the rationalization that this is somehow due to the difficult market. Although I must say, to J. D. Powers credit they note that the companies with the highest ratings are inclined to be more skilled at managing the customer’s expectations.

While the article obviously doesn’t report all the data, the analysis yields some interesting conclusions. “Notably, although the agent/salesperson has the largest impact on overall customer satisfaction among both home buyers and sellers, customer loyalty is stronger toward the real estate company than toward the agent. Less than 20 percent of customers say they ‘definitely will’ switch real estate companies if their agent moves to another company.”

If I owned a company, I’m not sure that I would sleep well at night as a result of that. This could be as much about inertia as loyalty. Let’s not miss the import of viewing these numbers from a slightly different angle. The data is suggesting that only one in five (20%) of customers see enough value in their agent to stick with him or her if that agent moves to a different company. Something doesn’t add up.

Note that the same analysis suggests “the agent/salesperson has the largest impact on overall customer satisfaction among both home buyers and sellers.” That’s a statement that’s hard to disagree with. So help me understand how an agent who couldn’t create value and loyalty on an individual level creates a high level of customer satisfaction for (and loyalty to) the company, please.

I’m the first to admit that the current market situation is causing a crisis for many agents and companies. In plain language, it’s darn tough to make a living in real estate–especially in rural Maine. But agents and companies should not be making that the customer’s problem. Managing expectations ought to be about the market, not about the level of service we are willing and able to provide.

Unfortunately, when satisfaction decreases, so do expectations. Some years ago Tom Peters had a lot of fun with a ficticious company who’s slogan was “We’re no worse than anybody else.” Unfortunately, that might well be what the survey is identifying as loyalty. Buyer satisfaction is at an all-time low. Seller satisfaction is decreasing. So the tempting conclusion for customers is “might as well stick with company x, they’re no worse than anybody else.”

Blaming the market doesn’t work, really. What about customers? Do they contribute? If customers do have a role in the state of affairs it is in the acceptance of mediocrity. (The survey notes that 60% of the respondents were repeat buyers and sellers–not limited to one experience.)

Customers: Raise the bar, increase your expectations. You are probably entitled to a lot more than you think. You can change these numbers.

If you are dissatisfied or having issues with your agent or company, check out this article What’s the Number for the Real Estate Police? As one who loves platitudes, I would close with “if you are not part of the solution you are part of the problem.”


May Sales Information

 Posted by at 8:06 am
Jun 242012

I found it mildly amusing that the MREIS (Maine Real Estate Information System) issued their monthly press release regarding May sales at about the same time I announced my vacation. Were I inclined to feel self-important I would speculate this is not a coincidence and there was concern that my vacation announcement might impact expectations regarding sales in July. (“Walter’s not working; sales will go down.”) I assure you my contributions (or lack thereof) will not significantly impact the sales data of either the county of the state.

Of course you’ve probably heard that statewide unit sales of residential property were up 32%. That’s certainly good news, but is tempered by the fact that comparing this year to last means comparing this year to a “bad” one. If a picture is worth a thousand words, the graph will show that the overall sales trend for May from 2007 continues a downward slant. But also do not forget this only represents one month–basing a trend on one month is not especially valid statistically.

Of perhaps more interest is the localized version… these releases include a “three month rolling average” by county.  For the months of March, April and May Piscataquis County Sales were up by nearly 13%–but understand that 13% represents four additional properties sold this year versus last and a median sales price this year of $60,000. (The median sales price indicates that half the homes were sold for more and half for less.)

The truly “bright spots” (measured by largest percentage increases) in our state are Washington County (162.5%) and Lincoln County (78.6%). Franklin County was the only county showing a loss (1.7%).

What all this means probably depends on your own bias and interest. Logically, with interest rates and prices this low, demand should (and will) increase–eventually. My instincts suggest that the road is a long one and I would be prepared for plenty of ups and downs.


Don’t Get Too Excited!

 Posted by at 7:53 am
May 272012

While it is not my desire to squash optimism, the recent sale of rose-colored glasses deserves some pause. If you have property listed in Piscataquis County I would not suggest you start planning how to spend the proceeds from your sale.

The latest press release from the Maine Real Estate Information System headlined the fact that sales and median sales price both were up in April (8.7% and 4.5% respectively). However, the numbers for Piscataquis County tell a slightly different story. County numbers are always reported on a three month “rolling average”–so the statistics I’m about to share are for February 1 through April 30. We’re comparing this year (2012) with last (2011). By the way, it’s important to remember that last year was not exactly a stellar year for the state or the county.

For the period noted, unit sales in Piscataquis County were actually down by 12.5% and the median price dropped a whopping 17.8%. Our county is a long way from “economic recovery” in just about every sense of the word.

To get a better sense of the market, consider the County Seat, Dover Foxcroft. (For those unfamilar with the area, our county is geographically large and very rural. The population of Dover Foxcroft is slight above 4,000.) There are (using MREIS data) currently 112 residential properties listed for sale in Dover Foxcroft. For the past six months, 18 have sold–an average of three per month.

A generally accepted real estate measure is “days on market” or “DOM.” Basically, this is a measure of how long it takes property to sell. You do not have to be a math whiz to see that with 112 properties for sale and sales rate of three per month, it will take… slightly over three years for all these listings to sell.

Now there are a lot of things “wrong” with this analysis–the largest being that it’s based on totals and really needs to be broken down either by price or location. The other observation that needs to be made is this area has always had a longer DOM that many others. If you are in the market in any way (selling or buying) further analysis is recommended, but it’s probably safe to say this is not a hotbed of real estate activity.

Markets with high inventory, low median price, and slow sales rates are often thought of as a “buyer’s market.” So while there’s plenty to choose from and prices are low (the median price for the rolling quarter is currently $60,000) it might a good time to buy. Again, further analysis of your individual situation is warranted.

(For those who are curious, one reason for the state-wide increase was a 20% increase in unit sales in York County. However, the median price of those sales did drop slightly.)