Obviously we are in a buyer’s market and negotiations are completely skewed to the buyers.  BUT, playing too hard can backfire.  If you are just looking for a deal then you can just keep putting offers out until you get someone to bite. It works.

Consistently, the easiest transactions are the ones where both sides are trying to be fair, not just trying to get a every single penny that they can out of the seller.  If one side feels the other is being fair, they will often let things go and negotiate easier on repairs which is often the biggest sticking point in transactions.

I have seen many deals fall apart recently due to hardball negotiation by buyers, sellers, and agents.  What buyers need to remember is that this is a very personal transaction to many sellers.  They can be insulted and regardless of how bad the market they will hold it against you.  The original contract negotiation will set the mood for the rest of the process.  One client felt very fortunate to have another offer come in because the original negotiations were strained and they weren’t looking forward to an inspection addendum from the buyer.

Unfortunately the attitudes of the agents can come in to play.  Usually agents are a good buffer between the clients.  We often soften the original reactions and can help keep deals together.  I made a comment that was misinterpreted one time.  I had meant to say that even though it was explained later, it had ticked off the other agent and set the tone.  That deal didn’t come together.

My very basic rules of negotiations? If you are looking for a deal, negotiate hard and don’t get emotionally involved.  Otherwise, whether you are a seller or buyer, negotiate from base of fairness.  They may not agree on your fairness but if the deal doesn’t come together you know where your intentions were.

Other negotiations thoughts?

• I haven’t seen comparables sway anyone in their thinking. Inevitably each side is looking at their own comparables.
• Convince the other side that you cannot go beyond a price for whatever reason.  Either the payoff on your loan or bank approval for the new loan.
• So often people play a Split the Difference Game where whatever the counter offer is the lean to a counter in the middle.  Expect it.
• Give the other side ample time to consider the offer.  Pushing for a quick answer can often lead to a “no”.
• As the seller make sure to give the buyer a couple of days to answer your counter offer.  You might get a better offer in the meantime. It has worked for me.

Those are some basics, can’t give away too much here. Remember, every negotiation is different.  You need to decide if you go for Win-Win or Win-Lose.  Neither are wrong, just depends on you.

photo via http://flickr.com/photos/maveric2003

Where were you when the original 9/11 happened?

I was underwater at the Oregon Coast Aquarium with my great late friend Tim Powell.  We were volunteer divers who were responsible for cleaning out the giant tanks where Keiko used to live.  Someone in the tube held a sign up against the acrylic telling us to get out of the water, which was extremely odd.  We spent the better part of the rest of our shift watching events unfold on TV.

The next time we went over, Tim had made us laminated American flags to strap to our tanks.  We got applause in the tube from patrons.  It made me feel proud of our country.

Where were you?

I downloaded Google Chrome just to see what it does.  It seems like it is a bare bones browser but that will change as developers figure out add-ons for it like they have for Firefox.  Internet Explorer loads so slowly that I hate it, and I hate that RMLS hasn’t figured out how to make their system compatible with other browsers.

In contrast to IE, Google Chrome is fast. I don’t know enough tech or code to know if the bells and whistles are what slows IE and other browsers down but Google Chrome loaded three chronically slow sites faster than my other browsers.  Google says they built it this way but we will see when they have add-ons.

The one irritant that I haven’t figured out how to change is the page scrolling. The browser doesn’t have smooth scrolling and jumps about three quarters down which is off putting when you aren’t familiar with it.  I expect new features and to be added on in the next month as people ask for them.

I have found one glitch. One site showed the most recent post as August 29th.  Looking through Firefox the most recent post for that site was September 2.  That is a weird glitch and shows why they are still in beta.

As far as the real estate side of it, I would suggest checking how your site works on it.  There is an option to send notes to google about problem pages.

And from the man who wrote “The Guide to Understanding Comics” Google had him write a comic on Google Chrome and why it is so fast but resistant to crashes. http://www.google.com/googlebooks/chrome/#

After looking through the comic book I have changed my mind about Chrome.  I will probably use it more as they have me sold, until someone proves them wrong, that they are the web-safe browser.  Extra features will come that will make it better.

I recently read and commented on a question posted on Trulia.com which asked,

I am about to finish my MBA and will be moving to Portland to take up a job in the Hillsboro area. Do I rent?

Now it seems the consensus answer was to rent for a variety of reasons. I agreed with the consensus. My main reason for telling someone to rent when they first move here is that they don’t know the area. Adding to that, they have the highest inventory in years to pick from and falling prices which gives some a reason to hesitate. Why not?

Specifically one of the agents in our office moved here in 2003. His brother, an agent, steered him to homes in his Bethany neighborhood. Later the agent wished he had bought in a different neighborhood but picked that one on the insistence of his brother the agent, who has since moved. He realized he liked the other neighborhood in less than a year.

There were two kinds of agent responses that made me cringe. One was the blatant advertising and a disregard of the being asked since they didn’t bother to answer it. This borders on spam and continues the Huckster image some have of us. Social media is new and many are still figuring out the line between promoting and helping. “Give first and then you might get,” should be the understanding of Trulia.com and Zillow.com’s answer section.

The second type of response that made me cringe, seemingly with pom poms in their hands, some agents said, “Buy, buy, buy!” And gave all of the typical reasons such as interest rates and the idea that homes are relatively cheap, etc. I am not going to pick on any specific agent that answered but many of the answers sounded like canned scripts.

“It’s always smart to buy!”

“Renting is just throwing away money.”

Even though one agent said that “we would likely see continued depreciation through a good portion of 2009,” he also said the answer to rent vs buy was, “Wow, simple - buy.”

The people pushing the buy idea didn’t question his finances, the size of the company he was going to work for, if there was a guaranteed contract at his new job,

Those are some of the comments that can cause distrust by the public. If someone talks in absolutes, I am likely to tune out. So if there are many agents out there saying “buy, buy, buy” without caveats and acknowledging that our industry and market is in varying degrees of turmoil the public will tune us out.

hoto via http://flickr.com/photos/rberteig

I took another Short Sale class today. I know most of the things the presenters will speak about but I want to get updated about their stories of dealing with banks.  Each person learns their own tricks of the trade and it is nice to hear from someone else that a certain trick, tactic or method works or learn a new one.

Ian Reekie from Platinum Loss Mitigation was the speaker today and I thought he did a great job. He painted a bleaker picture of the real estate world than I see but if my regular listings stop selling and am left with only short sales, then my perspective might change as well.

He agreed that some banks are getting better organized and decisions are faster.  Like others he also said that the deal hinges on the independent Brokers Price Opinion and not ticking off the person making the final decision.

I have heard many stories of files being “lost” and from insiders that it is usually lost in the trash after a Broker got pushy or nasty.  Just think of a driver in a company vehicle driving dangerously or cutting people off.  He doesn’t really care about his company and doing what is right.  It is just a job; one he probably doesn’t like.  Here is some of the information that he gave us enforcing the idea that more short sales are on our way,

• According to Zillow.com, 29% of homeowners owe more than the house is worth if they bought it within the last five years.
• That number is 95% for one city in California, which I missed the name.
• Bloomberg expects home prices to go back to 2003 values.  (I think this is possible due to lax loan standards that started about that time but this is hard to predict.)
• There are more 3-year Adjustable Rate Mortgages than 2-year ARM’s (I have also heard that 2007 loans are defaulting more than 2006 and 2005 loans.  If we have a wave of 3-year ARM’s defaulting soon we could be in trouble.)

Agents polled in the room gave bank approval times of 5 months, 6 months, 9 months and a year, though the year involved a bankruptcy.

Most agents also disagreed with NAR’s stance that this is a great time to buy and some of the other rosy things they had to say.  It is tough when your leaders don’t speak for you.

He gave an opinion that I hadn’t heard before which was not to accept offers less than 70% of market value.  He said this may annoy the bank and make them more difficult to deal with.  He felt that 1-2 out of 10 of these offers would work but that 50% offers never work.  The conventional wisdom has been to take any offer because the bank won’t start the process until they get an offer.

Of course there is the issue of determing market value.  Some areas are declining and even he said the homes sell below what he expects market value to be.  As far as the bank is concerned, market value will be determined by the independent Broker Price Opinion.

And still the process is thrown off by the fact that the banks don’t actually control most of the loans. They service the loans for investors.  They have to go back to the investor with all of the information you have given the bank to convince the investor that this deal is better.

Lots of work ahead for sellers and brokers dealing with short sales, and a lot of patience by buyers. If you have any stories of dealing with banks we would love to hear them.

It’s weird sometimes how rumors are quickly become reality.  Last week news broke that Mercury Companies was closing down all operations in every state they were in except Colorado.  Mercury Companies owned several Title and Escrow Companies here in the west and here locally they owned Security Title.  Today the rumor is (and I say rumor because nothing has been officially confirmed) that Western Title and Escrow will cease their Portland operations as well.

This raises several questions.

First, these are Title Insurance Companies, so what impact will this have on policy holders?

My answer…NONE!  Companies like these are underwritten by larger companies.  Take Security Title, they were owned by Mercury Companies and Mercury Companies are underwritten by First American.  First American is the largest title insurer in the world.  Furthermore, since these are insurance accounts they are protected.

Second, what happens to my money in escrow?

Again, escrow accounts (especially in Washington and Oregon) are regulated by state law and are continuously audited by the state.  If you had deposits in escrow they are still there.

Third, what happens to those employees?

That is still to be determined.  However, Fidelity Title and Stewart Title seem to be buying those books of business.  Here in Portland Stewart Title of Oregon has actually acquired Security Title along with approximately 25 employees.  Sources have told me that several of those employees will have to interview for their job.  However, several of their managers are assuming the same management positions at Stewart.

What can you do?

In many cases Real Estate Professionals build great, long lasting relationships with their Escrow Officer.  If your Escrow Officer’s company has been absorbed by another company and really like them stick with them.  They need you now more than ever.

If you are uncertain in regards to what’s happening with your title company then request a transfer of escrow form from the title company that you would like to close the transaction.

Most of all don’t panic!  Remember, Title Insurance Policies are underwritten by larger more secure companies and escrow accounts are protected accounts and in cases where fraud has taken place someone will go to jail.

Scott Bridwell has over 10 years experience in the Real Estate Industry.  His background includes sales and marketing for Title and Escrow Companies, he was the sales manager for a local builder and has four years as an Escrow Officer in both Washington and Oregon.

Currently he spends his time helping Real Estate Professionals with their online presence by coaching them on their social networking, and online reputation management.  He’s also a certified clock hour instructor for the state of Washington.

Scott also recently joined RETechCoach as a real estate marketing and technology consultant!

Want to know more?  Visit his blog www.scottbridwell.com.

I had just met Bill and Sheila at REBarCamp/Inman Connect and didn’t have much time to chat with Sheila beyond a brief introduction, but seeing the two of them together definitely gave me warm fuzzies.  Having recently lost my father, I know how devastating a sudden loss can be.  Bill is a fellow contributor at Agent Genius with me and an all-around great guy.

Now I’m going to plagiarize Benn over at Agent Genius since the words aren’t coming to me right now:

Goldstein’s Rosenbergs Rafael Sacks Funeral Homes
310 Second Street Pike
South Hampton, PA 18966

We’re asking that we all respect Bill’s wishes and spend this time with our own loved ones during this short pause.

Anyone that wishes to join this cause publicly on their own blog is encouraged to do so.

Send donations in lieu of flowers to the American Cancer Society, and please feel free to leave your comments to the Lublin family here as this is our electronic card to them.

If you would like to mail the Lublin Family a card, or other wishes, you can email Jay Thompson for information.

Although I have been back for over a week now, I am finally feeling fully recovered from my exciting time at Inman Connect San Francisco.

One of the big highlights for me was seeing Benn and Lani (the mad scientists behind Agent Genius) win the Inman Innovator Most Innovative Blog award, especially since I write over there as well.

It’s All About Relationships

Another great aspect of the week was seeing the real life success of online social networking.  I frequently teach Portland real estate professionals about the benefits of online social networking via sites like Facebook, ActiveRain, LinkedIn, Trulia Voices, Flickr and Twitter.  Unfortunately, I am not a REALTOR® (sorry for yelling) and I don’t have the opportunities to play with these in a real-life manner.  At Inman Connect, however, I was able to meet with many people I had met online (and who are incredibly great people offline as well) who were able to share their varied success stories they’ve had marketing themselves and real estate online.

I will be highlighting some of these real estate movers and shakers as they share their success stories with me in an effort to better educate the Portland real estate community that there is a fountain of opportunity waiting for you and all it will cost you is a little bit of your time.

An Offer for You

If you work in the real estate profession in the greater Portland area and you have a success story with online marketing, please let me know and I’ll happily feature you here as well!

photo credit: Afferent-Rapture.com

Anecdotal evidence isn’t great but with the changes going on inside banks, it may be all we have.  And I have heard enough reporting on the news to know that many reporters are just using anecdotal evidence for their stories.

I hear that some loan modifications are happening but they are essentially new loans.  The banks aren’t smart enough or at times able to just say, “Well you can afford $X? Sure, we will take that for now.”  They still want a statement of your income and all of your debts while you go through the same process that you would for a new loan.  I also hear that quite often they don’t work out but that depends on who is talking.  Some banks send people out to homes to sit with the homeowner to work out a modification but I don’t hear that story as much as the ones where it didn’t work.

Many ask why the banks don’t just reset all of their troubled loans and stop the rate adjustments that hit people the hardest?  With a foreclosure the bank loses money and 98% of the time they no longer have an income stream from the home since they don’t control where the new owner will obtain a loan.  If the bank resets the loans they would continue to have a revenue stream and hopefully the homeowner would be able to keep up until the market improved.

The obstacle to that scenario is that the banks don’t hold most of the loans; they only service them.  This is part of the reason that the world economy is in trouble.  These loans were packaged as bundles of good debt, which it wasn’t, and then only serviced by a company.

Countrywide announced last October that they would modify 80,000 loans.  Sounds like a lot, but according to this article that is less than 1% of the loans they service.  They only have servicing rights on the others and any change in the loan would fall back on Countrywide to pay.

The banks do seem to be getting more organized (Article: Short Sales: Banks Getting Organized) but they may have done that to the detriment of loan modifications.  I have been told that loan modification applications are getting extremely backed up while short sales applications are starting to speed up for some banks.  If you can get a loan modification or a forbearance to catch up, that will almost always be the best option.   Maybe they will get these departments running smoother.  In the past I heard that 1 out of 10 short sales succeeded.  Now with the rising foreclosures banks have gotten on the ball and I haven’t heard of one that hasn’t worked out yet.    I am hearing that loan modifications are happening but I do know they aren’t as simple as they should be or common as they could be.

Interesting photo via http://flickr.com/photos/wwworks/