From the category archives:

For Realtors

Is Your House Over-Priced? The Rule of Tens

by Shar Rundio


Several times recently I’ve been in the position where I have either turned down listings or not “gotten” them because I’ve refused to list them too high.  While we may be in a bizarre competitive ”Buyer’s market” in much of the Phoenix market right now, buyers still aren’t willing or able (we’ll talk about appraisals later) to pay too much for a house.  Sometimes, I’ll if push comes to shove I’ll allow a seller to list the property higher than I think the market will allow for as long as we have an automatic price reduction in place.  Now, all you purest REALTORS who are up in arms that I just said that, I do know that the first couple of weeks is when we’ll get the most showings and activity and I make sure a seller is fully aware of that.  But if they still persist and I think more reason can be seen later I’ll allow for it.

So once the house is listed how do we tell if a house is over-priced?

That’s when I use what I call the Rule of Tens.

  • If the house is on the market for 10 days with no calls or showings…it’s over-priced
  • If the house has 10 showings and no offers…it’s over-priced

That’s it.

Plain and simple…my Rule of Tens.

On a totally personal note:  10 is my youngest daughter’s favorite number.  Her name is KiersTEN and this year she’ll be 10…on 10/10/10.

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REALTOR’s Negotiation Tactics: The Escalation Clause

by Shar Rundio

I thought I’d share with you a bit of negotiation strategy that just helped my buyers secure the property they wanted with 5 other offers on the table…

Like it or not each REALTOR has their own “bag of tricks” (if you will) when it comes to negotiation tactics.  Now, I don’t really mean *tricks* as in the bad, unethical form of the word but rather negotiation tactics which have been found useful and advantageous to representing the buyer or seller in a transaction.   With the competitive seller’s market that has reared its ugly head in the lower end market lately I have found it useful to pull out the ESCALATION CLAUSE from my bag.  Dictionary.com defines ESCALATION CLAUSE (sometimes called an escalator clause) this way:

a provision in a contract calling for adjustments, usually increases, in charges, wages, or other payments, based on fluctuations in production costs, the cost of living, or other variables.

For our intents and purposes it works slightly differently.  Here’s how I might define it:

a provision in a purchase contract allowing for incremental increases in the offer price, up to a predetermined amount, based on and evidenced by competing offers.

Here’s how it might look:

A house is listed at $250,000.  Mr. & Mrs. Buyer would really like to pay $245,000 for it but they are willing to pay up to $260,000 for it.  They offer $245,000 and use an ESCALATION CLAUSE that says something like this, “In the event of a competing offer the buyers will pay $1000 over the highest offer’s net up to a purchase price of $260,000.  In the event of an escalation, seller to provide proof of competing purchase contract with LSR (that’s our pre-approval form here in AZ) or Proof of Funds. Seller represents and warrants that competing offers are true and valid offers.”

Without an ESCALATION CLAUSE Mr. & Mrs. Buyer do one of two things: they automatically increase their price to the highest they are willing to pay for the property OR they offer less than they might actually pay and gamble on what the other buyers are offering.

With an ESCALATION CLAUSE Mr. & Mrs. Buyer are able to offer what they might really want to pay for the house.  Then they use the ESCALATION CLAUSE to offer $1,000 (or $2,000 or whatever) over the highest competing offer up to their maximum.

There are a couple of things to keep in mind when using ESCALATION CLAUSES:

  1. Is there any way to really tell if the listing agent or seller is being truthful?  No, probably not.  There are liars and scumbags that exist everywhere.  Plain and simple, we do the best with what we can so make sure you are comfortable with the top price that you offer.  You may be escalated.
  2. In my experience banks won’t deal with them.
  3. Unless you remove it the appraisal contingency still exists so the property must appraise for the final price.

There you have it!  ESCALATION CLAUSES…the little gem that helped my buyers get the house they wanted and saved them $4,000 in the process.  I’d love to hear your thoughts and experiences regarding them.

Photo Credit: Stig Nygaard, Creative Commons

 

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Inman Connect: The San Francisco Treat

by Shar Rundio

So I’ve been slightly neglectful of my blog lately (OK, OK, I know…REALLY neglectful).  Well, no more!

Next month is Inman’s yearly Real Estate Connect San Francisco and I have been trying to swing a way to go.  It just so happens that the really cool Brad Inman gave the also really cool guys at The Real Estate Tomato 10 free tickets! (Watch for more from me about them…one of these days they’ll likely be assisting me with my blog design).  At any rate, the deal is that the first 5 people to enter automatically win and the next 5 are judged on creativity based on an exactly 50 word submission.

Here’s a little background for you before you get to see my amazing entry.  My household has been struck with a couple of NASTY illnesses this week and I for one am quite miserable right now.  In fact, it it wasn’t for that I would have entered much earlier and not had to be creative.  However, it just so happens that our family enjoys dumb poems as a form of entertainment and creativity.  I hope the Real Estate Tomato Staff does too!  So, without further ado here’s the best I have:

I didn’t get an easy ticket because I’m sick as a dog,

BUT, I recognize I need help with my blog.

I’ll buy a round at Beer for Bloggers,

As long as there aren’t any hoggers.

I want to meet Alfred from Zappos,

And keep my blog from being crappos.

Thanks for the consideration.  I look forward to seeing everyone in a couple of weeks!

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Bad MLS Photos, Continued…

by Shar Rundio

I thought I’d leave you with another great MLS photo for today.  

Seriously, do agents not look at the pictures that they post in the MLS…or does someone think this is acceptable?

Happy weekend!

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Keller Williams Realty Climbs to Third-Largest Real Estate Franchise in United States

by Shar Rundio

Exciting news from Keller Williams International.  As evidenced below, I’m not alone in loving the company I call my “family”…
AUSTIN, Texas, Mar 02, 2009 (BUSINESS WIRE) — Keller Williams(R) Realty Inc., announced last week at its annual convention in Orlando, Fla. that it is now the third-largest real estate franchise in the United States, surpassing RE/MAX(R) International. According to Steve Murray of REAL Trends, a leading source of analysis and information in the residential real estate industry, the Austin, Texas-based company claimed the number three spot with 72,794 U.S. associates at the end of 2008.
“The success of Keller Williams Realty can be directly attributed to the hard work and perseverance of our associates and the soundness of our economic and organizational models,” said Mark Willis, CEO of Keller Williams Realty, Inc. “While others might be looking at this market and seeing fear and uncertainty, we have always approached it as our opportunity to shine and grow. And that mindset has paid off.”
The company has been gaining ground for the last three years, outpacing pervasive downward trends in the real estate industry. From 2006 to 2008, Keller Williams Realty increased its associate count by 52 percent, market share for its offices increased 83 percent and agent gross commission income went up 35 percent. Currently, the company has 679 offices operating in the United States. The company also shared more than $30 million in profits with its associates in 2008 through its company-wide profit sharing program.
“Through profit share, our phenomenal coaching and training and our technology offerings, we are offering agents their own ‘bailout plan’ for this market,” Willis added.
The company also announced that after years of searching for a partnership to provide its associates with affordable health insurance, they are moving forward with a solution.
The soon-to-be-launched Keller Williams Health Providers Program will include options for major medical, limited medical, catastrophic coverage and a separate cancer plan. The health insurance coverage is the first step toward a total wellness program for associates.
“We have always been very aware that as independent contractors, our agents face barriers to obtaining health coverage,” said Mary Tennant, president and COO of Keller Williams Realty. “We know that for many, this new option may alleviate some of the stress that they face in today’s economy. After all, our associates are not just our partners – they are our family.”
Last fall, the company also announced the launch of KW Commercial, a new division of the company dedicated to providing commercial real estate associates with specialized technology, marketing tools and resources. KW Commercial already has more than 220 active brokers across the U.S. and Canada.
“Our growth in the last year and now becoming the third-largest real estate company in the United States was a true team effort and a company-wide win. We are so grateful for all of the leadership and commitment our associates have shown to power through this shift,” added Willis.
About Keller Williams Realty Inc.:
Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with more than 690 offices and 74,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. 
SOURCE: Keller Williams Realty Inc.
If you’re considering a career in real estate, I’d love to chat with you over a cup of coffee or Diet Coke.  
Building careers worth having, businesses worth owning and lives worth living.
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