Wasilla Real Estate News, Valley Market Real Estate

Wasilla Real Estate, Monday Market Memo for 7-30-2007 July 30th, 2007

Categories: Monday Market Memo

Wasilla Real Estate News

Statistics for the week of July 23-30, 2007

I’d say three weeks in a row makes a trend.  After climbing steadily since February, the total active inventory has dropped for three weeks in a row.  I would expect the total inventory to drop by fall, but this is a bit early.

Closing were very weak but I think that will be made up next week since many people try to schedule their closings for the end of the month.  We had some very healthy pending statistics in June and those should be closing about now.

Pendings are doing OK as well.  We had three of our own listings pend last week and represented the buyers in pending two other listings so it was a busy week for us. These are the three that pended, (1,2,3), in case anyone is curious.

To the right is a chart from the AlaskaMLS system.  (Click on it to enlarge)

Ignore the inventory bars on the chart because they don’t make a lot of sense being based only on the last 30 day sales compared to the overall inventory. 

But pay attention to the blue line.  This is the total residential sales in the Mat-Su Borough since July of 2005.  Notice that the total sales line is still holding fairly steady with normal seasonal fluctuations. It’s hard to say that we have a housing crash by looking at that line.  I have seen people write and heard  people say that the housing market in the valley is crashing like it did in the late 1980s.  We can’t really have a housing crash while sales remain steady.

Notice also the bright green line on top.  The total active listings in 2005 were much lower than they are now.  What that line doesn’t show is that new construction was a large part of those active listings.  During that time a seller could expect very fast action on their home if it was priced even close to the realistic sales price. 

That is no longer true, the total inventory of homes on the market is much higher and new construction is not as significant a factor.  So although our total sales remain steady, for each individual seller the market feels slower since they are competing with so many other finished homes. 

If you would like some help determining how to market your home, I now offer consulting services that do not require you to list your home to receive help from an experienced Realtor.  Give me a call if you would like to talk.  My cell is 907 232–7900, or you can always just drop me an email.

“This representation is based in whole or in part on data supplied by, and to, the subscribers of Alaska Multiple Listing Service, Inc. (AK MLS, Inc.). AK MLS, Inc. does not guarantee nor is it in any way responsible for its accuracy. Data maintained by AK MLS, Inc. is for its own use and may not reflect all real estate activity in the market. “

Written by Marty Van Diest 1 Comment »

How Are Realtors Paid? July 26th, 2007

Categories: Commission Rates, Consulting, For Sellers

I mentioned in a previous post about how loan professionals are paid that I would write about how Realtors are paid. 

Of course, the seller who lists his house with a Realtor knows how it is done because he or she signs the contract to pay a certain amount to the Realtor.  The listing contract specifies that when the house is sold, the real estate broker will be paid a certain percentage of the sale. 

The agreement is between the seller and the listing real estate broker.  The buyer is not a part of this agreement at all.   It is generally left to the listing licensee to decide how much to pay a cooperating real estate broker for finding a buyer.  This amount is then posted on the listings that is seen by the Realtor. 

When the buyer’s Realtor looks at the listing they can tell exactly the percentage they will receive if they sell a house.  They may be paid 2% on the sale of one house and 3% on the sale of an identical house down the street.  Some people feel that a licensee will show the house with the higher commission and ignore the other. In my opinion that may be true but it is not common.  Most buyers representatives look out for the benefit of their buyer regardless of the commission amount. 

It is expected among many Realtors that the listing broker will share the total commission equally with the buyer’s licensee.  They feel that they should get an equal share of the commission because the transaction would not happen without a willing buyer.  However, it is not necessarily the case that the commission is shared equally. 

While an equal share of the commission may be an expectation, that is not necessarily what is done.  Nor is true that the commission should be shared equally.

Some local listing licensees will give the buyer’s realtor less than 1/2 the commission, and some will give more than 1/2 the commission to help attract a buyer.  It would be in the interest of the seller to know how the commission is being shared.  If the seller knows and is in agreement with the method that their licensee is using than everything is cool. 

Buyers should also know how, and how much, their representative is being offered to sell a particular house.  In todays slower market we are seeing more and more ‘BONUSES”,  offered to buyer’s representatives if a particular house is sold.  I wonder what a buyer would think if their Realtor showed them a house in which he was being paid 3 1/2% commission but did not show them a similar house that only had a 2 1/2 percent commission.  

Let’s have a little transparency here…it will help all of us in the long run.

If you want to work with a Realtor who gives you many options on how to pay, and how much to pay…check out my consulting articles. And if you want specific numbers where I have a sliding scale from $150 all the way to a 7% commission, give me a call.  My cell is 907 232–7900

Written by Marty Van Diest Please leave a comment.

Wasilla Real Estate, Monday Morning Market Memo, 7-23-07 July 23rd, 2007

Categories: Monday Market Memo

Not sure if we are seeing something here but the inventory has dropped for the second week in a row.  It hasn’t dropped by much, but any drop is news. 

In addition, the pendings, and closed sales are up.  I would say that we may be seeing a trend.  But we need a few more weeks to be sure.

Notice that the average price for this week in closed sales is below $200K.  That is because 23 of the 32 houses that closed this week were less than $200,000.  Compare that with the fact that about 75% of the homes on the market are over $200,000 and you can see why the higher price homes take longer to sell.  You have 75% of the sellers competing for 33% of the buyers.   Boy…that is a rotten paragraph…you need to be a bean counter to even understand it.

We have personally been VERY busy.  Many of our listings have pended in the last couple weeks, some that have been on the market for a year.  Now we are ready for some new listings.

If you have a house that you need to sell give us a call.  We can help you, and we will give you a choice in how to pay us as well as how much to pay.

Our office number is 907 373–0999 and you will get either Jay or I.  If you want to fax us anything, our fax is 907 745–5486

Written by Marty Van Diest Please leave a comment.

Lenders Are Not All Created Equal July 21st, 2007

Categories: Closing Costs

Alice Roe of US Bank spent quite a bit of time on the phone with me today  after yesterday’s blog post.  Alice lives in Arizona but specializes in Alaskan loans.  She straightened me out on a few things. 

First, I was wrong that a mortgage broker’s compensation is not disclosed.  Alice said that it is disclosed on the settlement statement but often no one pays any attention to it because it is not shown as a cost to either the seller or the buyer.

She also pointed out something very important that I should have spent more time on. 

That is the fact that it isn’t so much the amount that your lender is paid, but what they can deliver to you that is important. Loan professionals are not commodities.  By that I mean that they are not all created equal.

For example, pork bellies are a commodity.  If you invested in a shipment of pork bellies from the Chicago Mercantile Exchange, hopefully you would sell them before you actually took delivery.  But if you couldn’t get them sold in time, you should be pleased to know that the 20 ton shipment of pork bellies delivered to your front door meets all the qualifications of every other 20 ton shipment of pork bellies.  It’s a commodity that you can count on. 

It isn’t true that one loan professional is the same as the one in the next office.  Some have more experience and can find a good loan for you when others might not.  Some will think about the fact that you know people, who know people who will send their friends to them if they treat you right.  Some don’t really care and only are interested in the fact that they can make money if they get you a loan.

You should find a lender that can really help you.  Ask your friends, ask your Realtor, ask your family about people that have helped them find a good loan at a fair price. 

Or course Realtors are not commodities either.  If you are looking for someone that will listen to you and not just try to sell you something give me a call (907 232–7900), or drop me a note.

Written by Marty Van Diest Please leave a comment.

How Much Does That Loan Cost? July 19th, 2007

Categories: Closing Costs, Commission Rates, Wasilla Real Estate News

Back in the early 90s when I first started in real estate someone thought it would be a great idea to train real estate agents as mortgage loan brokers as well.  The thought was to have a one stop office.  Lets just have them find a house and get their loan from the same person.

I was brand new in real estate and the obvious conflict of interest didn’t even occur to me so I signed up.  I took the training and learned a lot about how mortgage brokers work and how they make money.  It was the making money part that made me decide to step back out of it. 

But I did help two friends refinance their home.  They got unbeatable loans because I personally and purposefully didn’t make a dime on the deals.  I did not charge them any loan fees and priced their loan at par, which was the lowest interest rate quoted to me by the company.  Basically, they got the wholesale rate.

I learned that mortgage brokers have a lot of control over how much money they make on each loan.  They can charge fees to the borrower that are shown on the good faith estimate and on the settlement statement AND they can make money on the “back side” of the loan that is not disclosed anywhere. 

It is very possible that a mortgage broker could charge no up front fees at all on the loan and still make more money that another lender who charged a 1% loan origination fee.  According to Karen George in Arizona it is possible to make as much as 5% on a conventional loan.  In fact even more can be charged for a sub-prime loan.  Most of the local lenders don’t make anything close to this amount, but they should still tell you how much they are charging.

Why is it important to know how much your lender is making?  Because YOU are paying the bill.  The money that is going into the lender’s pocket is coming out of yours even if you don’t know it.  I think people should be paid for the work they do, and they should be paid fairly.  But I think it’s fair that we know how much we are paying for a service.

Most but not all of the local lenders I talked with were very defensive when I asked them how much they made on their loans.  Apparently most of the local mortgage officers, (as opposed to mortgage brokers), don’t have much control over how much they are paid.  But they still didn’t like talking about it. 

There were three people that did seem open about discussing this with their clients.  These were Tara Murdoch-Barnes and Jo Oxentenko of Wells Fargo Home Mortgage,(376–2308), and Kirsten Forbess of Alaska USA Mortgage, (352–8306).

If you have read this far, it means you are interested in this subject.  If so, check these two websites out that were recommended by a local loan officer friend:

• http://www.searchlightcrusade.net/ 
• The Mortgage Professor

Some may say ‘what’s good for the goose is good for the gander”,  how much are real estate licensees paid?  I’ve discussed that before in commissions.  But there are some things most people don’t know about how Realtors are paid and that is a subject for tomorrow’s blog post. 

Written by Marty Van Diest 1 Comment »