The New Interview Questions before Hiring a Real Estate Agent to Sell Your House:

We are stepping over the threshold of 2009 and real estate has changed yet again. This is the most challenging market that many of us will EVER see. While rate are matching those of fifty years ago, prices have changed dramatically. Nationally we are down almost 29% from the highest point of the market in mid 2006. Furthermore, 45% of the closed residential properties in October required money from the seller to sell. These are ‘tough realities.” For Realtors these times are also challenging, particularly given the fact that most real estate listing contracts are written as contingent agreements: If the property does in fact sell, then, and only then, does the agent earn and collect his or her previously, independently negotiated fee. If the agent works for a year and it does not get to closing, then he or she does not earn any fee. This has put great stress on real estate agents trying to earn a living.

With these facts and the stage, it is very important that you hire an effective and proven agent. Several questions will help you determine who that agent is?

1. First and foremost, what is the agent’s license number and are they licensed in the State your properties is located in? Is the firm licensed in said State? Is the agent a Realtor? Realtors must ascribe to the Code of Ethics. Have there been any disciplinary actions taken by the Department of Business Regulation or the Board of Realtors against the agent and/or firm? Are there any pending complaints?

2. What is the agents record/experience? How long has the agent and firm been in business? How many properties have he or she sold in the past year? Is he or she part of a team? What kind of back up does he/she have? Is the agent selling real estate full time, or is this a part time position? Does the agent actually live in Rhode Island year around, or does he or she spend the winter in Florida? What other States is the agent licensed in?
Does the agent use a lockbox? If he or she is going to be showing the property, is he or she available and reachable by cell?

3. How does the agent/company market property? With 87 % of all buyers using the web to search for properties, how does agent market in web centric world? How does agent differential the sellers property with so many listings in the market? Is print advertising important in the Strategy? Based on sources of buyers it should not be, particularly if you believe in “greening’ the marketing process. What is company web site like? Is it central to the marketing plan? Does agent use any video and television? Does agent use social media? If so how? Will agent provide specific marketing plan?

4. How often does agent provide feedback and updates for seller? Generally it should be a least once a week. In additional, the agent should provide feedback in the manner, vehicle that the seller prefers: cell-phone, text, email, snail mail, etc. Communication is key for the process.

5. How did agent arrive at value? Particularly in a declining market, how did agent determine price? What is delta between list price and sales price? How long should it take to sell property? When does the agent anticipate revisiting price if it does not sell right away?

6. Who follows up on closing details to make sure property gets to closing? Smoke inspection; follow up on mortgage approval, coordination of closing attorney, water meter readings, etc.?

7.How much do you charge? How much do you offer cooperating agents? Do you have any referral fees that you are paying from the fee? If there is a dispute with the deposit and the buyer does not ultimately perform, what is your fee?

8.If you are not satisfied with the performance of the agent, is there a cancelation fee and if so, how much?

9.Finally, have the agent provide a list of prior, clients. Finally, call them for feedback and advice.


Good luck!

Ron Phipps, CRS, ePro, GRI, GREEN

How long before it sells? Hard to say

Providence Journal December 21, 2008

How long does it take to sell a house in today’s chaotic real estate market? Although potential sellers can get plenty of advice — most of it centered on setting a realistic price at the beginning of the process — there is no definite answer.

According to statistics collected by the Rhode Island Association of Realtors for the third quarter of this year, the median “days on market” numbers for all three categories of residential properties were up from the same period last year, including single-family and multifamily properties (88 this year, 72 last year), and condominiums (124 this year, 102 last year.)

Most agents agree that, at best, the statistic is a ballpark figure; overpriced houses will linger on the market much longer than average, and properties priced right will sell most quickly.

But even the president of the Realtors’ association acknowledges that the statistics have very little real-world usefulness given the way properties are listed and relisted when contracts expire, prices drop or sellers change real estate agents.

“It’s not a true statistic,” said president Paul Leys.

The “days on market” statistics may have had had a bit more meaning when market conditions were better. When the market was booming, many properties would be under contract well before a 60-day or 90-day listing contract would expire. But today, it is not uncommon for houses to sit on the market for many months, or even for more than a year.

Frustrated sellers are more likely to change agents and/or engage in multiple price cuts, actions that could result in their property appearing in the Statewide Multiple Listing Service as a “new listing.”

In the MLS, the “days on market” clock is reset when properties are relisted after a previous contract has expired, according to Donna McGinn, administrator of the Statewide Multiple Listing Service.

For example, if a house had been listed by Realtor A for 90 days, then listed with Realtor B for another 90 days, and the seller then signed a new listing contract with Realtor B for another 90 days and the house sold 15 days later, the statistics could show that the house sold in 15 days.

As a practical matter, however, real estate brokers and salespeople, and others who have access to the MLS database, can find the listing history of individual properties, including how long it has been for sale and how many times the price has been cut, Leys said.

Buyers who want to know this information can ask any agent for it. (Brokers and salespeople could risk losing their state real estate licenses if they misrepresent facts to buyers, even when they are representing sellers.)

“Buyers should know how long a property has been on the market,” Leys said. “It’s the reality.”

“If you want to track a property, an agent can provide that tracking for you,” said broker Ron Phipps, owner of Phipps Realty of Warwick. But he added that “as an agent, I want the timeline to be reflective of my listing agreement.”

Although the current system has its flaws, Phipps said, the days on market can provide information on how long a property takes to sell at a certain price point. For instance, if a property priced at $500,000 sat on the market for five months, but was relisted at $425,000 and sold within one month, the statistic reflects the marketing time based on the “real market price,” he said. “At 500, they weren’t really on the market in a realistic way.”

Phipps said the high number of distressed properties in today’s marketplace is affecting the average time on market. In the case of a short sale, in which the lending bank has to approve a sales price that is below the outstanding mortgage, many extra weeks of delays are common, he said.

“I’ve got a couple of properties that are upside down,” Phipps said, referring to a case when the mortgage is higher than the current market value. Problems and delays are occurring “not [due to] a lack of offers, but an unwillingness of lenders to work with us,” he said. It can take a lender 30 to 45 days to respond to an offer on a short sale, Phipps said, and that would count as extra “days on market.”

Leys and McGinn said the association has been thinking about altering the way relistings are handled. McGinn said the Statewide MLS may get a computer program that would automatically add plat and lot numbers to properties, and this would give each listed property an “individual identifier.”

Theoretically, if someone takes a property off the market for the winter, after it’s been on the market for 200 days, the “days on market” clock could stop when it was taken off the market and restart at 201 when it went back on the market in the spring.

But for Phipps, and for many agents working to sell real estate, the attraction of relisting long-marketed properties as “new listings” is the hope that this action will bring fresh attention from the market, even if the “new listing” moniker isn’t exactly accurate.

“My job as a listing agent is to sell the property,” Phipps said. “…At the end of the day, price really matters. If it’s well priced, it’s going to do well….The average time on market, frankly, is a distraction.”

Real Estate Bytes December 2008

It is December 11 and already after 6 pm. It is cold, rainy and dark. Like many Realtors across the country, I am at my desk putting in a long day to pull some transactions together, keep others together and identify some new business. (Sometimes I feel like a real estate transaction janitor). For almost 30 years, real estate has been my job and my passion. The cyclical economics of real estate remind me of the weather in New England. We have seasons: seasons of planting, harvesting, tending and hibernating. We have seasons of wet springs, warm summers, bountiful autumns, and raw winters. We know this in our bones. Furthermore, this economic winter is chilling us to the bone, but we will as we have get through this.

It has been a challenging year for everyone, with few exceptions. Whether you are a homeowner, a renter, a Realtor, it is a rare person who says this year has been easy. However, there are some rainbows out there if we look up. Interest rates are great. Think about it: You can obtain a 30 year fixed rate, conventional mortgage for less than 5.5%. The average price of a single family home has come down to under 218k, making housing more affordable for more families. Condominium sales were down this year, but average price went up a few thousand dollars. Additionally, the number of pending sales is up and inventory is down. There are some great deals out there and some investors are scooping them up. In short, these are encouraging signs in the middle of the real estate storm.

One important element is becoming apparent. There are fewer full time Realtors working now, but their value is becoming more obvious. Whether pricing, negotiating, staging, positioning, marketing, closing etc, professional experience will make a real difference. This is true with both the buying side and the selling side. Even in so called normal, traditional transactions it has become an exercise of immense patience, and persistence to complete the sale. Selecting a home is easy. Obtaining the financing and getting it closed is very challenging. Sellers are beginning to understand this new real estate reality, too: The interview questions have changed lately when making listing presentation. Pricing is still important, but many sellers are asking more questions: What do you do to stage? What is your marketing plan, specifically? The question of what is your experience has changed to how many houses have you sold this year? It is also strange as a couple of homeowners have asked if this is my full time job. Both buyers and sellers are asking about professional designations and what they suggest.

Finally, in a market with so many foreclosures and short sales, we are reverting back to a caveat emptor, buyer beware. These homes do not have completed seller’s disclosures. Often there is no water, heat or electric. They are very difficult to inspect and research. If those facts were not enough, add the fact that this category of property takes so much longer to negotiate and acquire. While there may be great opportunities, there are great challenges.

It is New England, so we will bundle up and get through the winter.

NAR Installs 2009 Officers

ORLANDO, Fla., Nov 10, 2008 /PRNewswire via COMTEX/ -- Charles McMillan, a Realtor(R) from Irving, Texas, was installed today as 2009 president of the National Association of Realtors(R) at the association's Board of Directors meeting during the REALTORS(R) Conference & Expo here. More than 20,000 Realtors(R) and guests from the United States and abroad attended the annual meeting this year.
(Logo: Logo: http://www.newscom.com/cgi-bin/prnh/20080923/NARLOGO)
In 2008, McMillan was NAR president-elect, and he was NAR first vice president in 2007. He also served twice as NAR Region X vice president, which comprises Texas and Louisiana. A Realtor(R) for more than 20 years, he is a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. McMillan was president of the Texas Association of Realtors in 1998, and named Texas "Realtor(R) of the Year" in 2000. He was president of the Greater Fort Worth Association of Realtors(R) in 1991, and was selected as GFWAR's "Realtor(R) of the Year" in 1986.

Vicki Cox Golder, a Realtor(R) from Tucson, Ariz., is 2009 president-elect. A Realtor(R) for 35 years, Cox Golder owns Vicki L. Cox & Associates in Tucson, specializing in commercial, farm and land brokerage, as well as building and development. In 2005, she was NAR's Region XI vice president, representing Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming. Cox Golder was president of the Arizona Association of Realtors(R) in 1994, and served as president of the Tucson Association of Realtors(R) in 1991. She was named "Realtor(R) of the Year" by her local peers in 1989.

Realtor(R) Ron Phipps from Warwick, R.I., is 2009 first vice president. A Realtor(R) for more than 30 years, Phipps is broker/president of Phipps Realty in Warwick, specializing in residential brokerage. In 2003, he was NAR's Region I vice president; the region comprises Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. Phipps was president of the Rhode Island Association of Realtors(R) in 2000. He was also president of the statewide Multi-Listing Service (MLS) in 1993. He was named Rhode Island's "Realtor(R) of the Year" in 1995.

James L. Helsel Jr., a Realtor(R) from Lemoyne, Pa., remains as NAR treasurer in 2009. A Realtor(R) for 34 years, Helsel is a partner with RSR Realtors(R), a full-service real estate company in Harrisburg, Pa. He served as NAR 2002 Region II vice president, which comprises New Jersey, New York and Pennsylvania. In 1994, Helsel was president of the Pennsylvania Association of Realtors(R). In 2001, his state peers named him "Realtor(R) of the Year."
Gary Thomas, a Realtor(R) from Orange County, Calif., is 2009 vice president and liaison to government affairs. A Realtor(R) for more than 30 years, Thomas is president of RE/MAX Real Estate Services in Orange County, specializing in residential brokerage. In 2001, he served as president of the California Association of Realtors(R), and was also awarded the "Realtor(R) of the Year" by his state peers. Thomas was president of the Saddleback Association of Realtors(R) in 1987, now known as the Orange County Association of Realtors(R).
Steve Brown, a Realtor(R) from Dayton, Ohio, is 2009 vice president and liaison to committees. A Realtor(R) for more than 30 years, Brown is broker-owner of Irongate Inc. In 2005, he was Region VI vice president, which comprises Ohio and Michigan. In 2002, Brown was president of the Ohio Association of Realtors(R). At the local level, Brown was president of the Dayton Area Board of Realtors(R) in 1995, and was selected Broker-Owner of the Year by the board in 1998.
NAR's 2009 regional vice presidents are:
Bonnie Guevin, Manchester, N.H., Region I (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont); Joseph Canfora, East Islip, N.Y., Region II (New Jersey, New York and Pennsylvania); Dale Ross, Potomac, Md., Region III (Delaware, District of Columbia, Maryland, Virginia and West Virginia); Jane Cox, Lancaster, Ky., Region IV (Kentucky, North Carolina, South Carolina and Tennessee); Russell Grooms, Jacksonville, Fla., Region V (Alabama, Florida, Georgia and Mississippi);
Cathy Sherman Bittrick, Grand Rapids, Mich., Region VI (Michigan and Ohio); Stan Sieron, Belleville, Ill., Region VII (Illinois, Indiana and Wisconsin); Scott Louser, Minot, N.D., Region VIII (Iowa, Minnesota, Nebraska, North Dakota and South Dakota); Doug Smith, Little Rock, Ark., Region IX (Arkansas, Kansas, Missouri and Oklahoma);
Connie Kyle, Baton Rouge, La., Region X (Louisiana and Texas); Keith Kelley, Las Vegas, Nev., Region XI (Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming); Jim Johnston, Pocatello, Idaho, Region XII (Alaska, Idaho, Montana, Oregon and Washington); and Toby Snitkin Bradley, Santa Barbara, Calif., Region XIII (California, Guam and Hawaii).
The National Association of Realtors(R), "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the Web site's "News Media" section in the NAR Media Center.
REALTOR(R) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS(R). All REALTORS(R) are members of NAR.
SOURCE National Association of Realtors

Translating the Real Estate Numbers: What do they mean October 2008

The National Association of Realtors just released the housing numbers for September. Believe it or not, there is actually some good news. Seasonally adjusted, national sales of homes improved and were sold at an annual rate of 5.18 million. This is above the 4.9 rate that we had seen this summer. This rate is up 5.5%, which is great news. The reason that we are finding ‘a floor’ on the volume of sales is that we are finally moving from attractive prices to compelling prices. The average price moved from $210,500 in September of 2007 to $191,600 September of 2008. This is a drop of 9.0%
One of the main reasons for this significant drop is the mix of houses being sold. A significant portion of homes being sold are ‘REO’s” (Real Estate Owned, by banks, typically foreclosed) and short sale. If 1 in 4 or 5 houses fit in the distressed category, price will come down. Obviously this is what has happened in Rhode Island. But the result of lower prices has been an increase in the pending index of homes in the Ocean State. In 2008, the number of house pending increased by 9% over September of 2007. This is also encouraging news.
One other really important fact in the report is that over 80% of the purchases in September were owner occupied. This is a much higher than normal percentage.
This means that the people buying are purchasing for shelter and will in fact occupy the home. This is a strong stabilizing trend. It also suggests that these buyers will be re creating neighborhoods and taking better care of their properties.
What is also absolutely apparent is that the numbers range broadly across the country and here in Rhode Island. We tend to look at the national numbers and assume they apply directly to our city/town and or neighborhood. This is not the case. As all real estate is local, you need to look at the data for your immediate area to really know what is going on. A Realtor can provide the data and the analysis. Get the advice. The real estate rule which has been: location, location, location is now “all real estate is local.”


To Recap:

What do the number mean?

There is a floor for the number of houses sold just over 5 million nationally.
Prices are still correcting.
Inventory is dropping which will help stabilize the price.
1 in 4/5 Houses in Rhode Island is a foreclosure or a short sale.
Most buyers are in the market to buy a home to occupy for them selves.
Buyer Purpose for buying: shelter.
We really are in a global economy.
Yet all Real Estate is LOCAL.