The Bubble May Just Be In Our Heads

A lot of information has been floating around the news media lately about the "bubble" theory of real estate. That is, the theory that the real estate market is going to burst. This theory has no merit.

First, understand that there are three basic premises that undermine the discussion of a real estate bubble:

* There is no national real estate market.
* The real estate market doesn't explode or crash.
* The market has limited relevancy to the shrewd investor.
* The real estate "market" is based on local economies.

When people speak of the real estate economy, they are using nationally based (US) statistics. For example, Fortune magazine reported recently that since the early 1960s, average residential real estate values have never had a down year. This statement is true. But while these numbers are measurable, they do not reflect the intricacies of local real estate markets.

The stock market is based on the national, even the world economy. The real estate market is based on local, and, in many cases, micro-local economies. What's happening in Los Angeles does not directly affect what's happening in Toledo.

True, certain factors such as interest rates affect all the markets. There really is no broad barometer to measure the entire housing industry in the U.S. Average prices, average new homes sold, and average homes built nationally have little relevance to your market.

And, within a particular city that is doing well, there may be certain neighborhoods doing poorly for a variety of reasons, such as over-building of new homes.

So while statistics, calculations, and economic factors are relevant, so is common sense: Take a look around and see what's really happening. Talk to real estate agents, investors, and lenders in your area for a better picture of what is going on.

Don't look at broad nationwide, statewide, or even city-wide statistics. Be concerned with the average prices in the particular neighborhoods in which you buy houses, the average time on the market, and the changes in sales prices from last year to this year.

* Real estate markets do not "crash"

We all remember October 19, 1987, known as "Black Monday." The stock market lost 22percent of its value in one day what investors call a "crash."

There have been times when real estate values have taken 22percent hits in certain cities and in pockets within cities. However, no real estate market dropped 22percent in one day, one week, or even one month. In fact, the real estate "crash" of the late 1980s took several years to bottom out in most markets.

Some people are theorizing the collapse of housing market by comparing it to the stock market. Robert Shiller, author of Irrational Exuberance, claims that the same mentality that caused the rise and collapse of the high-tech market will likely follow in the real estate market. Let's consider that argument for a moment...

At its core, the housing market, like the stock market, is all about supply and demand; when more people want to buy than sell, prices go up, and vice-versa. However, the stock market is much more whimsical than the real estate market. People often buy into stocks at the top of the market based on future potential, not inherent value.

True, people are buying some properties in some markets for top dollar hoping it will go even higher, but real estate still has inherent value because you or someone else can live in it.

If the neighborhood in which you live goes down 10percent in value, are you going to move? Not likely, you'll just be bummed about it. The transaction cost and headache involved in moving is not worth it for most people. Contrast the stock market where a zillion investors can sell off in minutes by a click on their computers.

Supply and demand also work differently in the housing market. Right now, demand outstrips supply in some hot real estate markets like Los Angeles and New York City. But, people are starting to realize that even if they sell for top dollar, they will have to pay top dollar to stay in the same market, so why bother?

This phenomenon is causing limited supply and even higher prices. In other words, the price increases are not necessarily about "irrational" demand, but rather limited supply. While the old expression, "Trees can't grow in the sky" is applicable, so is the old adage, "They ain't making any more of it."

More people are moving into the U.S. than moving out, and so long as that trend continues, we're eventually going to run out of room. Likewise, if your city has limited space and more influx than out, prices are likely to stay where they are.

Finally, there's the possibility that the traditional economic theories of bust and boom are simply flawed and no longer applicable. In other words, just because things have been going up in the housing market for so long, doesn't necessarily mean they will drop accordingly.
Economic trends causing the market to remain strong

Immigration. Millions are immigrants are moving into the U.S. every year. If the government creates an amnesty program, we now have millions more potential home buyers who can legally show income and qualify for a loan. More demand, means higher prices.

Migration Trends. Face it, baby boomers can't live on social security and pay the property taxes on their expensive homes any more. They've got three choices: continue working, take out reverse mortgages, or sell and move to a cheaper area.

This mass-exodus is likely to increase demand in the cheaper retirement communities over the next ten years. Though prices have skyrocketed in South Florida, Phoenix, and Las Vegas, it's still a whole lot cheaper than Boston or New York City.

Marriage Trends. People are getting married later, causing more single people to buy houses and condos.

Easy to get a loan. Interest rates being so low for so long doesn't hurt either. But, it's more than low interest rates; it's how easy it is to get a loan.

Lenders figured out over the last fifteen years that instead of lending only to people with good credit, they can make money by lending to people with bad credit. Also, the Internet has led to fierce competition among lenders making it extremely easy and cheap to borrow money.
What about rising interest rates?

A lot of people are worrying about how rising interest rates will affect the market. Certainly, a rapid rise in interest rates may affect prices, since the higher the interest rate, the less house a buyer can afford. But, interest rates alone do not determine prices, but rather supply and demand.

So long as a particular area has more buyers than sellers, the values will remain strong. And, the Federal Reserve is well aware of the interest rates will impact the housing market. Interestingly, while the rise in interest rates in the U.K. has "cooled off" the housing market, there's been no collapse as predicted.

Finally, keep in mind that even if a real estate market is reaching a peak within a particular area, it doesn't necessary mean it will necessarily collapse. The fact that real estate values in your city have climbed at twice the rate of inflation last year yet only half the rate of inflation this year doesn't mean the bottom is falling out.

It is inevitable that the "boom" markets like San Diego, Las Vegas, and Phoenix will cool down. But, there's no evidence to justify a rapid decline in prices. Most experts agree that the likely scenario will be a "cooling off" where prices will remain flat, appreciating just above average inflation.

The Federal Deposit Insurance Corporation (FDIC), which regulates banks that hold 30percent of the credit risk on outstanding U.S. mortgages, doesn't appear concerned.

In fact, FDIC researchers examined data from fifty-five metropolitan areas that saw a "boom" at various times between 1978 and 2004 and found only nine instances of a bust that followed. And, many of those busts were related to local market factors such as the oil market crash in Houston and Denver in the 1980s.

Finally, keep in mind that just because your city's average real estate values or home sales went down, doesn't mean it went down everywhere in the city. The problem is, people see headlines like "Average Real Estate Prices Falling" and panic.

Declining values of $1,000,000 homes skew the average, so you can't pay attention to broad numbers. You need to look specifically in the price range and location of houses you are buying.

The mass overbuilding of $500,000 homes in many markets won't generally affect the older $150,000 homes that average investors work. Much of the new home building across the country has NOT been low-end homes.
The market has limited relevancy to the investor

If you buy and hold for the long term (fifteen or more years), you aren't likely to lose. Real estate values generally go up in the long run, with few exceptions. The same is probably true of the stock market in the long run, but there's one problem: There's no guarantee any company you invest in will be in business in fifteen years not even Xerox, IBM or AOL!

If you buy and flip properties quickly, the market appreciation or decline is not all that relevant to your profit.

It is relevant to know where your market is currently going (up or down), but don't worry too much about the "bubble" bursting; real estate markets do not collapse in 3 to 6 months.
Danger in interest-only loans?

A lot of people are worried that if interest rates rise, many people who bought with interest-only or adjustable rate loans will lose their homes. Certainly, there are some people who are playing a very dangerous game with buying more house than they can afford. However, the entire mentality of the market may actually be changing to adapt to changing interest rates.

Many people are buying homes with adjustable or interest-only loans knowing full well that in five years they will either move or that their house may have no equity. People are starting to treat their homes like car leases, caring only how much it costs monthly to have the best they can afford.

On the other hand, if you are buying investment properties with negative cash flow and expect the values to increase over two to three years, shame on you! What if the values decrease? What's your backup plan? Can you rent it for break-even cash flow? Can you sustain negative cash flow until the market rebounds?

If so, then don't sweat it. You'll also pick up a whole bunch more properties at the bottom of the real estate cycle. If not, then you are a speculator, not an investor, and you are at the whim of factors beyond your control.

Such activity is very risky, to say the least, and it is disturbing to see that many investors are doing just that in some of the hottest markets. And, they are doing so with interest-only loans, with no "Plan B."

The bottom line is, the real estate market may go up, and then again, it may go down. So what? Don't bank on appreciation; buy properties below market, and have a "plan B" if it doesn't work out. Do this, and you will see that the "bubble theory" is full of hot air.


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The Changing Face of Homeowners Insurance

Two states to watch in 2007 will certainly be Mississippi and Florida. The real estate markets in these two states have traditionally withstood natural disasters such as hurricaines. But insurers are fleeing the disaster-prone areas, leaving homeowners, and states, with no safety net.

State Farm made a huge round of news stories when it announced that it would not write any new policies in Mississippi. At the heart of the issue is whether hurricane damage was caused by wind or water damage, as homeowners' policies do not cover against water damage.

Insurers in Florida are in the process of scaling back their wind policies. Now Florida's legislators are trying to keep both insurers and property owners in the state. "At the root of the trouble is that insuring against a major storm in much of South Florida has been deemed simply too risky to be affordable."

Mississippi's response has been to threaten to mandate insurance companies into writing policies in that state, which has drawn widespread criticism from homeowners in other states. Florida's plan, meanwhile, has been to promise billions of dollars of bailout monies for both parties.

Certainly, every state has its own unique propensity for natural disaster. From tornado damage in the Midwest to California's ubiquitous earthquakes, the nation is poised to watch the developments in Florida and Mississippi very closely.


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Real Estate partnerships: The Tips

To get the real estate job done, you'll form many partnerships -- some of which will last as long as a single deal and others that'll last for years and years. In this section, I take a look at those who will join you in the dance of real estate sales.

Earning respect from your peers

The sales arena - and certainly the real estate sales arena - is a magnet for those with big egos. To earn the respect of other real estate agents, you have to perform and succeed. Your peers will base their respect on how they feel you perform in the following three areas:

Production growth. When you produce, you get noticed. In fact, many of your associates will notice your success even before you see a commisssion check, because they'll notice your name on the company listings board.

At first, they may attribute your success to luck, thinking "He got good floor calls," or "He hit a hot streak," but as your listings keep appearing, their respect will build.

Few agents perform consistently over the long haul. Most have a good month, or quarter, or year, but only a rare few constantly finish at the top of the income list. However, when you do, your peers will most definitely notice and share their respect.

Business ethics. Because the commissions can be large, many people feel that acting unethically is acceptable. For many agents, money, or the opportunity to make money, too often exposes character flaws.

Be an exception. Maintaining your values even in the most competitive situations enhances your own self-respect while also earning the respect of your peers.

Life balance. Agents notice and respect other agents who have their priorities in order; who manage not to be controlled by their businesses; and who carve out good chunks of time to spend with their friends and families. Few agents manage to earn a large income while also protecting their personal time. You'll be recognized and respected as one of the best agents in the country if you can strike this important balance.

Working with Agents in your office

Nearly all agents are independent contractors earning no base salary and depending entirely on their own skills, actions, and activities to create income. This pay structure breeds competition within the industry and within each company. The trick is to balance that competition with cooperation.

Striking this balance isn't always easy. Invariably, you'll end up competing with agents inside your own firm for clients and dollars. One example of many is finding that the agent in the next cubical over is working on the same lead you are. This situation is usually the result of a prospect who chose to work with several agents at one time but who didn't reveal the lack of allegiance to any of them. Later, when one agent writes the contract - after both showed the home - well, you can imagine the office arguments I've seen. This situation certainly presents a moment where a good broker makes a diffference. A good broker can mediate the issues between the agents, making sure that the client is getting good service while handling all the interpersonal issues between the agents.

To succeed in this competitive office environment, follow this advice:

Use the other agents as mentors. Nearly all agents owe a debt to some other agent who helped them along the road to success, and they feel a sense of obligation to repay the favor by being similarly helpful to a new agent like yourself. Find a mentor. When you do, be respectful of the mentor's time, take action on the mentor's advice or counsel, report back on the success you achieve, and say thanks over and over again.

Help other agents serve their clients better. Agents announce their "haves and wants" - the homes they're working to sell and the homes they're seeking for clients - and few agents even tune in. Be an exception.

I made a lot of money matching haves and wants for other agents. When I'd hear an agent describe a buyer seeking a three bedroom, three bathhroom, $250,000 home in the Riverside School District, I'd share information on my two listings that could work and would ask if they'd shown them. I'd also mention that I'd seen a great house on Elm Street listed by another firm that meets the description. By helping the other agent better serve his clients, I was also serving my clients by generating showings for them.

Hold open houses for other agents. Open houses can be burdens on the schedules of busy agents. Offer to serve as a stand-in host, supporting your associates while also giving yourself an opportunity to create prospects and business.

Ask other agents to work with you on listings. If you lack skill or experience in a certain price range or geographic area, you risk losing a listing to a more established agent. Be preemptive instead. Ask a more estabblished agent in your firm to co-list the property with you. Through this short-term partnership you'll capture the opportunity to expand your business while you learn and earn.

Cooperating with agents in your marketplace

More than 90 percent of all real estate transactions come through the MLS, which exposes their availability to agents throughout the marketplace. As a result, you're constantly working jointly with agents from other firms to achieve sales. As you work with these agents from other firms, form cooperaative relationships by following this simple advice:

Deal with the other agents honestly and fairly. Give them the information they need about your client or the property without giving too many details. Always remain aware of the fiduciary responsibility and privacy protection you owe your client.

Involve brokers when necessary. If problems arise between you and the other agent, enlist the help of your broker. If paperwork comes back too slowly or you feel you're not getting the full facts, get your broker, or the other agent's broker, involved. Move quickly if you sense that a lack of cooperation is affecting your client's security in keeping the transacction together.

Developing strategic partnerships

Mortgage originators and loan officers lead the list of strategic partners who can help you get real estate deals done. These people play an essential role in securing your clients' loans. They can help you expand your business through several avenues:

They can help you serve lower-credit clients. Mortgage originators who are skilled and have a broad line of loan products are open to loan requests from a broadly diverse economic segment, which increases your pool of prospects.

Some mortgage originators invest in joint marketing efforts. These programs may consist of sending mailers to your sphere of past clients or to prospects in your geographic area, buying e-mail lists and respondding with e-mail marketing messages, buying Web site ads, or paying for a banner along the bottom of your real estate magazine ads. Depending on the arrangement, the mortgage originator may pay for some or all of the costs involved.

Mortgage originators can help convert leads. Most agents make the mistake of getting the mortgage originator involved in a transaction too late. They wait until after they've secured the client relationship to introoduce their loan partner. Make the introduction earlier in the lead converrsion process. Tandem lead conversion is a powerful strategic partnering technique.

The odds of lead conversion rise significantly when two strategic parttners are working the same contact. Once one of you achieves a faceface meeting, you both win, because either of you can cross-sell the services of the other.

The mortgage originator can play the role of a prospect's professional advisor. While most prospects view agents as salespeople, their psyychology toward mortgage originators is quite different. They tend to see and trust mortgage originators as consultants rather than as the salesspeople that they truly are. By forming strategic partnerships with your mortgage originator, you can put that psychology to work and secure more clients more quickly. I've seen agents increase their closed transacctions by over 25 percent through this simple tandem lead conversion approach.

Also form a strategic partnership with your title company. Title representaatives can help you conduct research and establish geographic mailing lists. They also can provide statistics that help you see what homes have sold and at what prices over past years, including which areas and neighborhoods have seen the highest number of sales.

Each state and province has different rules regarding how much information they can share. Check with a title representative or your broker to find out the possibilities in your market area.

FSBO Real Estate Channels™ Reports Growing Buyer Activity

“Now is the time for FSBO sellers to get their homes listed on FSBO Channels™, Craigslist, and any other internet sites offering listing".

FSBO Channels™ reports today that they have experienced strong daily increases in visitors to their national network of For Sale by Owner sites which is being lead by Atlanta, New York City, Portland, Phoenix, Seattle, and Tampa channels. In these six markets, visitor traffic has doubled and tripled each week over the preceding week for each of the past three weeks, possibly signaling a turn around in the real estate market. They also report a dramatic rise in inquiries from buyers throughout the nation.

“Now is the time for FSBO sellers to get their homes listed on FSBO Channels™, Craigslist, and any other internet sites offering free listing”, says Bert L. Bill, COO. “Real estate had moved to the internet, so get your listing as much internet exposure as possible”, he added.

FSBO Channels™ is a national “For Sale by Owner” real estate network that offers free listings. FSBO Channels was launched on August 8, 2006 with the introduction of Tampa FSBO Channels. The popularity of free “for sale by owner” listings has resulted in FSBO Real Estate Channels growing to 27 blog sites in just 6 months. Thousands of homeowners have listed their homes on FSBO Channels making it one of the fastest growing internet real estate networks in the nation.

FSBO Channels™ is managed by BlogSpot™ Brands a leading internet developer of business, eCommerce, and social blogs with an active network of more than 60 blogs.

On January 17, 2007, BlogSpot™Brands launched CheapBuy™ Channels a “buy direct” virtual shopping mall. Upon the launch of this blog based mega shopping mall, they had attracted more than 1,000 brand name stores and companies such as Zales Jewelers, Rooms To Go, Lands’ End, and Starbucks.


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Websites Every Home Buyer and Seller in Connecticut Should Use

This list is not comprehensive but these sites are staples in my real estate agent repertoire. Maybe you know some of them, maybe you don’t - but you should…

Agentsonline.net - Want to know what real estate agents really think? This site is a lively forum where agents ask each other questions and get advice. Another great feature is that consumers can also ask real estate agents questions and get feedback, without any obligation whatsoever.

Visionappraisal.com - This is the largest single source of real property and sales information in the state. If the town you’re looking for isn’t covered by Vision Appraisal, here are some other sites I know of. If it’s not on this list, try searching on-line for the name of the town and “assessor”. If they have information on-line, there will be a link on their page. Note: not every town has this information on-line.

* Totalvaluation.com
* Town of Windsor CT
* Town of West Hartford CT
* City of Hartford CT
* City of Waterbury CT

CT Data Engine- This is a hodgepodge of real estate and demographics information. Want to know the average rental rates in New Haven? How about the average sales price for homes in Wethersfield? Or the median income for Fairfield County?

HSH - Get accurate mortgage rate info and do research on things like the LIBOR, the index many home equity lines of credits are based on.

CT Mill Rates By Town - This was last updated in September 2006. Check directly with the town to confirm the mill rate as it’s budget time in Connecticut and the number may not be accurate.

Rate the Towns - Every year, Connecticut Magazine rates each town/city in CT and compares it to towns/cities of a comparable size in categories like education, cost of living and leisure.

CT Clic - Please, folks, make sure every contractor or real estate agent you hire is licensed and bonded. This site will at least answer the license question.

City Rating -Their crime statistics are interesting for general purposes. If you really want to know the statistics or what type of crime there is in a particular area, call the local police department - they will be more than happy to tell you what crime is like in a neighborhood and what’s causing it. Another great source is SecurityOnCampus - Crime statistics on college campuses - which affect students and faculty.

Real Estate Link Exchange

If you would like to exchange links with us and add your site to our link pages simply fill the comment and send us details. Below you will find some copy/paste link suggestions to our websites. You may use anyone of them or create your own.

There are only a few simple requirements:

1 - Our link can’t be located on a link farm or FFA page.

2 - We try to keep our site family friendly so we will not link to sites that should only be viewed by adults. We will not link to hate sites.

Below are copy/paste link suggestions you can use.

Real Estate Blog
Comprehensive real estate and property listings. Includes information on buying and selling, tips on building, an auction timetable and other helpful.
http://realestate.wtslink.com/

Name and email are optional (they are needed only if you want a confirmation when your site is added). We do not send junk email or sell/transfer email addresses to any third party.

When suggesting a link please keep in mind this is a family friendly website.

Your First Name:—-><>

Your Contact Email:-><>

Your site’s Title:–>

Your site’s URL:>

URL to our link:>
( Page on your site where we will see the link back to our website.)

Description of your site. (20 words or less)

Please send above details by using below form/or add me at your IM


Sales representative:
Mas Dini Bin Muzammal
YM:Abg_hensem1 at yahoo.com
Gtalk: Adfunk
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Email: adfunk at gmail.com

Real estate sales, prices cool in SouthCoast

The once red-hot Southeastern Massachusetts real estate market has officially cooled, the Massachusetts Association of Realtors announced yesterday.
The fewest detached single-family houses in 10 years sold last year, and prices moderated, the group said in its fourth-quarter report.
"The market is balancing," said Realtor Maggie Tomkiewicz of Dartmouth, adding, "and that is a good thing."
The region had the biggest drop in sales of single-family homes and condominiums in the state, down 25.5 percent.
The median price for a single-family home in Southeastern Massachusetts, however, dropped only 1.1 percent to $281,850. Condo prices shot up by 10.9 percent, with the median price increasing from $153,250 to $170,000.
"This is a much more normal market," said Ms. Tomkiewicz, past president of the association. "If you are pricing a property properly, it will sell."
A market segment of real estate that is of particular interest to New Bedford is that of multi-family dwellings. Multi-family sales in Massachusetts declined by 18.4 percent. The median sales price of a multi-family dwelling dropped 2.7 percent to $360,000.
Financing is still favorable and the supply of housing is dropping across the state, association president Doug Azarian said yesterday.
Housing stock declined by 33 percent during 2006, from 15.9 months to 10.6 months, Mr. Azarian said yesterday. A balanced market is created when there is a 7.5- to 8.5-month supply, the association said.
Mortgage giant Freddie Mac reported yesterday that 30-year, fixed-rate mortgages averaged 6.30 percent this week, up from 6.28 percent last week, according to the Associated Press.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, edged up to 6.03 percent, compared to 6.02 percent last week.
Five-year adjustable-rate mortgages rose to 6.01 percent, up from 5.99 percent last week.
One-year ARMs rose to 5.52 percent, up from 5.49 percent last week.
"It is still a buyer's market, because there are still lower rates and because buyers have more houses to look at," said Judith Perry, a real estate agent for Jack Conway in Mattapoisett and southeast regional vice president of the Realtors Association.
"People were buying in 2006 but they were hesitating because they thought there was a better deal out there. They looked at more houses, 10 or 12, where in the past they would look at an average of about six," Ms. Perry said.
Despite the drop in sales volume, 2006 was still a busy year in the state, the third-highest volume year on record for condominiums and houses, following only the sizzling 2005 and 2004, respectively, the association said.
"For people looking to buy, 2006 was definitely a great year to do it," Mr. Azarian said. "The strong supply gave buyers the opportunity to find the right house at the right price, while sellers who priced their homes correctly were still able to realize significant gains."
The association asserted that real estate remains a profitable investment, offering the example of a home bought in 2002 at the median sales price of $279,000, reselling in 2006 at the median price of $350,000, an appreciation of 25.5 percent.

Double Your Money By Investing In Real Estate

“With a $5,000 real estate investment opportunity you can double your money within a year. That is a much better return than any bank, and most stocks can offer,” states Jaime Polanco.

Jaime Polanco is a real estate investor with a portfolio of properties nationwide. He is also President of AmeriVision Mortgage Corporation, a nationwide mortgage company based in Southern California.

“Large fortunes are made in real estate, and we want to help smaller investors to join with us and grow financially. We are looking for investors with as little as $5,000 up to a
maximum of $300,000 to participate in the profits of our real estate programs.”

“Investors will enjoy a 25% return on their money, and if they re-invest will double their money within a year.”

“If you are expecting a tax refund you could be in the road to being a real estate investor. Many are refinancing and put the home equity in their existing home to work.”

“Investing in real estate is not as tough as most people think providing you have the time. But with our program you don’t need the time because we do all the work.”

“We acquire properties that are run down and therefore below market value. We refurbish them, and sell them for profit closer to market value.”

“As we already have pre-approved buyers on a waiting list, there is very little delay in occupancy once the home is refurbished.”

“We are continually purchasing properties nationwide. For instance we just acquired eight homes in Georgia, and we received commitments for all of them within a few days. These homes are now in the process of being refurbished.”

“We offer some homes for zero down payment to allow young families become homeowners. In many cases a down payment is the only obstacle that stands in the way of families becoming home owners. They have the ability to make a monthly mortgage payment, but have never managed to save for the initial down payment.”

“By removing the down payment obstacle we help a young family become home owners and furthermore we do not incur any additional expense with the home remaining vacant. A win-win situation!”

“Unlike other real estate investors that want top dollar for their properties, we are more concerned with making less money and helping families become real estate owners. Our investors are happy because their money turns over quicker. That way everybody wins and this is truly our AmeriVision,” concludes Polanco.

Where is real estate headed from here?

The real estate market is stabilizing. But some analytical models are showing some signs of total collapse in the next few years that can real scary.

There was no doubt that the residential real estate market saw the bubble burst last year. The analytical models tracking the bubble syndrome are now predicating something bad. Every bubble burst has five distinct waves on unfolding events. First is the phase of disbelief. That happened last year. Then come the ten to twenty percent drops in prices shocking every asset owner. This is the first wave. The first wave ends when almost all are convinced that the total collapse is evident.

The second wave is actually counter trend. The prices recover silently and the market tries to convince all that the bad stuffs are allover. The market players try to look into scenarios where there can be some bargain for quick profit.

In the mean time fundamentals get weak. Alert investors and asset owners recognize the problem areas. That is actually happening now after the second wave is about to be completed. The mortgage default rates and risk assessments in banks have spread the real fears. The third wave is devastating. The fundamentals force investors and asset owners to sell. The buyers disappear. Prices go into a free fall.

That is exactly what is going to happen now. The foreclosures will skyrocket as investors start handing over the property keys and walk away.

The thirst wave is always devastating. There is one silver lining to all this gloom and doom. If for some reason third wave fails, it means the fundamentals overall are in great shape. That will create a new bull market.

Only time will say what will happen.

Looking for Texas Real Estate professional

Here’s your chance to be one of the three members of the Texas Real Estate inspector. The only requirement is you must have five years experience as a professional inspector. They will appoint the three members on February 26, 2007. For more information visit here: http://www.trec.state.tx.us/. Texas Real Estate is one of the leading Real Estate business in the country. That’s why the competition of Real Estate Licensed individual is quite tough now. In order to be on top you must be well updated on the newest trend on Real Estate industry in Texas. You can take a Texas Real Estate License Courses. Either online or a school near your place in Texas. This is a must if you want to be on Real Estate business.

Grant for Investing in Real Estate

How you will fall in love to obtain gift for to invest in that real estate? You can, and there can be to legke than you can think! Will several types of gift for invest in that real estate. You select to be used for you depend on the types of properties, is which you they are interested in to buy. If you look, that you buy your first single house of family, then you can qualify for the gift from the federal government, or the special financing from HUD (ministry of home construction activity and urban development). In addition, much declare and mestnya government have programs which they make it possible you to be used for the gift for to invest in that real estate, and these can be used for to buy your first house. Another type of gift for to invest in that real estate for those they prefer to proinvestirovat’ in the residential property of income. This type for free, which there will actually not be gift on all, supplements the part of the rent of your tenant through system voucher known as the “program of division 8″ HUD’s. In the form of the fact that of den’g it is paid by federal government immediately into your of calculation in the bank each month, to obtain tenant in this program it is valid as to obtain monthly gift from dyadyaa Of sem! The third type of gift for to invest in that real estate for those prefer to proinvestirovat’ in specifically the forms of komercheskogo property it answers special or uniquely potrebnostyamy. For instance, there will be the subsidy of government existing for constructing the means of medical competition and means which tyuey sluzhyat need the handicapped or underprivileged. It is final, you can can to qualify for the gift for to invest in that real estate if you will be woman or minority. A government have much differently the programs of the gift of existing for the people in different groups they want to begin or they grow the matter, and your real estate investing activities can qualify as the matter. In order to summarize, many reasons for the government will financially-economically support property investing the efforts of the individuals of those switch oned in different types to invest that not moved. Your activities can be lowered in the limits of the parameters of a certain program of government, pozvolyayushch you qualify for the gift for to invest in that real estate. It can pay to make a little to investigate in order to find out of that the program, if any, you can qualify dl4. now, go make more than proposals!

Financial decisions for Real Estate

When you help clients make real estate decisions, your advice has a long lasting effect on your clients' financial health and wealth.

In most cases, home equity is the single largest asset that people own. Your ability to guide clients to properties that match their needs and desires, that fit ithin their budgets, and that will give them long-term gain from minimal initial inyestment will impact their financial health and wealth for years to come.

Your influence as a wealth advisor reaches far beyond clients who are in a position to own investment real estate. In your early years, many of your clients may be first-time buyers who are taking their first steps into the world of major financial transactions. Advise them well and they'll remain clients and word-of-mouth ambassadors for years to come. See Chapter 15 for more information about keeping clients for life.

Back in the days of the early 1990s, before the advances of the Internet, the consumer's only avenue to information about homes for sale was through a real estate agent. Every other week, agents received phonebook-sized perioddicals presenting information on properties for sale, with each new entry accompanied by a small, grainy, black and white picture.

Today, consumers can go online instead of going to a real estate office to launch their real estate searches. With a few keystrokes and mouse clicks, they have access to a greatly expanded version of the kind of information that agents used to control. However, once consumers discover a home they want to see, they must contact either the owner or an agent to gain inside access. This is where things get tricky.

Often a consumer signs off the Web and contacts an agent to get inside the home, as if the agent is simply an entry device. As an agent, you need to demonstrate special skills to first qualify the consumer's interest and ability to buy and then to convert the inquiry into a committed buyer client for your business. Next topic gives you ten quick tips to adopt when working with buyers.

How to become a professional Real Estate Guy

Real estate agents join doctors, dentists, attorneys, accountants, and finanncial planners in the ranks of licensed professionals that provide guidance and counsel to clients. The big difference is that most real estate agents don't view themselves as top-level professionals. Many agents, and a good portion of the public, perceive themselves as real estate tour guides, as home invenntory access providers, or even as just necessary cogs in the wheel of the property sale transaction. The best agents, however, know and act differently.

Real estate agents are fiduciary representatives and financial advisors `not people paid to unlock front doors of houses for prospective buyers. A fiduciary is someone who is hired to represent the interests of another. A fiduciary owes another person a special relationship of honesty, committment, exclusivity in representation, ethical treatment, and protection. Build your real estate business with a strong belief in the service and benefits you provide your clients, and you'll provide a vital professional service while being recognized as the valuable professional you are.

8 trends that will help sell your home

8 hot design trends with big payoffs

Glass tiles for kitchens and bathrooms are in; granite countertops are out. And those bamboo floors? They're so yesterday.

Selling a home is never easy, but in this housing market it's going to be even more difficult. All is not lost, however. There are ways to make your home more appealing to buyers, which could result in a faster sale. Many homeowners make improvements before putting their home on the market; the key is in doing them the right way.

Mark Nash, the author of "1,001 Tips for Buying and Selling a Home" and the soon-to-be-published "Real Estate A-Z for Buying and Selling a Home," says home sellers in 2007 should consider the trends that are going to be popular with homebuyers this year. After surveying 923 real estate agents, Nash has the following eight suggestions for making your home attractive to buyers:

If you're redoing a kitchen or bathroom, consider using glass tiles instead of ceramic ones. They're gaining popularity again because of reflective qualities.
Avoid installing bowl-shape, above-the-counter bathroom sinks. They look pretty but have proved to be harder to maintain and keep clean.

Use engineered stone compound for kitchen countertops. The material is less expensive than granite and is expected to be the trend this year.

Don't install too many glass cabinet doors in your kitchen. They look better in magazines than they do in real life, where homeowners must keep their cabinets in perfect order or suffer embarrassment.

Consider replacing a wooden or chain-link fence with a wrought-iron one. Wrought-iron fences portray a look of luxury.

When repainting trim for shutters, doors and window frames, go with bold and deep colors. And don't get rid of the trim around interior window openings -- it only looks cheap.

If replacing floors, avoid bamboo. This flooring was popular when it debuted, but now users are saying it is easily dented and scratched. It is also more likely to warp due to weather and humidity.

If you're adding new construction, don't employ concrete blocks in exterior walls. They are not attractive and are more likely to leak moisture if not properly installed.

Uncovered: A New Resource for Real Estate Investment Opportunities in Puerto Vallarta, Mexico

Vallarta announces a full online resource for discovering real estate investment opportunities in Puerto Vallarta, Mexico. With conditions similar to the property boom in California, Puerto Vallarta is poised to become an international performer with a solid return on investment. Visitors are able to access a significant knowledge-based investment resource center at the fundVallarta.com website.

Historic property investments may point to a significant current investment opportunity in beachfront property in Mexico.

[This is the best beachfront coast line for real estate investment and vacation getaways in the world.
fundVallarta.com (www.fundVallarta.com) has been monitoring the trends in beach front property and believes that Puerto Vallarta is not only desirable property, but has the potential to be a significant investment opportunity.

Did you know?

Puerto Vallarta has a population of 350,000 with 2 million visitors annually.

Puerto Vallarta has been named the best beach in Latin America by Travel and Leisure Magazine Readers Survey (all 25 miles).

Humpback whales winter in the Bay every year. Dolphins, giant mantas, sea turtles, and over 100 species of birds also live here.

The Puerto Vallarta area and surrounding region has a very active real estate market.

Source: Virtual Vallarta

Dan Ralph, Director, US Marketing and Investor Relations, has a very exciting story to tell. His award winning investment strategies have helped to finalize millions of dollars in property acquisitions each year. Regarding the potential boom in ocean front property in Puerto Vallarta, Dan Ralph notes, "[This is the best beachfront coast line for real estate investment and vacation getaways in the world."

In addition, Dan has developed a website to assist those who may find themselves interested in real estate investment opportunities in Puerto Vallarta. The real estate investment boom in Mexico can provide personal enjoyment in the, "beautiful Bay of Banderas, which comprises over 50 miles of pristine coastline between Yelapa, Jalisco to the south and Rincon de Guayabitos, Nayarit to the north. Guayabito is located in the heart of the Gold Coast of Nayarit, which is considered to be the present day 'California of Mexico'."

The partnership at fundVallarta.com is well versed in both American and Mexican property laws and cross-cultural investment opportunities.

Dan's website provides a listing of current offerings along with a comprehensive knowledge-based resource center providing applicable articles for your consideration. A blog is also available to help answer any questions you may have.

Cyberbuying real estate

The days when the only realistic course of action for prospective homebuyers was to scan localities and properties personally are over. Though personal inspection of short-listed options is obviously still de rigueur before the final purchase, the actual process of short-listing has become increasingly 'virtual'.

Today, a significant section of Indian homebuyers launch their search by scanning available options listed on the Internet. It is only after this process has yielded enough prospects that they physically inspect properties. Certainly, there are a number of advantages to using the on-line approach in the initial stages of a home search. The Internet allows a prospective homebuyer to analyze the 'vital statistics' of an unlimited range of properties in the shortest possible time.

Online real estate listings often feature photographs, as well - this helps in the visual aspect of home selection. However, the hackneyed slew of artist's impressions certainly serves as no more than the roughest of yardsticks. In this respect, we are still a way off from more advanced Internet listing systems in the West, wherein buyers can inspect properties in 'surround-view' panoramic views.

Far more important than the often-misleading visual aspect, however, is the fact that real estate listings on the Internet describe at least some of the features of the locations in question. Indian property buyers are now highly attuned to the need of proximity to important features such as schools, places of religious worship, shopping centers, leisure facilities, public transport options and general connectivity to key areas within the city.

Nor does the Internet's utility in property location end with developer's listings, which will understandably not enumerate an area's drawbacks. Basic search engine skills suffice to establish almost any location's status in terms of traffic patterns, general property rates, incidence of crime, existing and potential hazards and the presence or absence of basic amenities.

The Internet is a very useful tool when it comes to eliminating properties and localities on the basis of personal preferences. No longer is a homebuyer limited to choosing from a handful of available options because of budget constraints.


Of course, the Internet is not a complete substitute for a real estate professional when it comes to the transaction stage. Nor do any but the most foolhardy buy a property without actually visiting and inspecting it. The advantages that the Internet offers in terms of real estate buying are limited to rendering the initial weeding-out and short-listing process more efficient, organized and time-effective.

However, the Internet is also invaluable in terms of budgeting and finding suitable home loans by a process of comparative 'shopping around' for the best that could prove to be extremely frustrating and tiresome if the prospective borrower were to conduct it in person.

Get The Orlando Vacation Home Of Your Dreams

Florida, the sunshine state, is known for a good reason; the sun never disappoints you at any given time of the year and that is the main reason why many migrate to this state in the cold winter months. But, if you want to know how to get the best deal of staying in Orlando during the winter while not having to spend a fortune in the process, the answer is simple, get an Orlando vacation home.

Why Choose Orlando?

Florida holds many attractions out of which one of it’s biggest is the Walt Disney World situated in Orlando. This attraction alone brings millions of people from around the world year round to vacation in the magic land of Walt Disney World due to which any property in Orlando is considered an absolute fabulous investment.

Besides Walt Disney, there are many other attractions, which involve the adults as well (not that adults don’t enjoy the world of Walt Disney) such as golf, Sea World of Florida, Parks and Museums. Acquiring an Orlando vacation home is a wise investment that will reward you year round.

You can use your Orlando vacation home when you desire in the winter months and the rest of the year you can hire it and, thus, have your property pay you for vacationing as well as for its own maintenance and taxes.

Renting An Orlando Vacation Home

If you don’t choose to invest in purchasing a vacation home you can always rent one whenever you desire. There are two ways to rent an Orlando vacations home and they are: through time-sharing or just for the time you desire. If you choose to hire a vacation home through time-sharing again, you will have to make an initial investment and then work out the dates when you want to spend time in your Orlando vacation home with the person with whom you just brought the home.

However, if you want to hire a vacation home only when you desire then you will need to approach a travel agent who will help you find the best available bargain for you and your budget.

Helpful Tip

If you are planning to spend more than couple of months every year in Orlando, the best way to is to invest in either a time-sharing vacation home or purchase a property that you can hire when not in use and if you are not sure when or how long you are going to spend each year in Orlando then you may want to consider hiring for the limited period you visit only, in order to save yourself money and time.

Real Estate People & Places

PEOPLE

Prudential Preferred Realty has named its top agents for December.

Jan and Russ Greer of the Butler office led in residential sales. Jacquie Williams, Greensburg, was first in listings. Judy Mortimer and Chuck Swidzinski, Butler, were No. 1 in listings sold. Brian and Karen Cummings, Bethel Park, led in new construction listings, and Barb Averell, North Hills, was first in new construction listings sold.

Mark Pelusi of Coldwell Banker Real Estate's Peters office has earned his associate broker's license. He has been a Realtor since 1977 and is a member of the Real Estate Cyberspace Society.

Linda Ward of Washington has joined the McMurray office of Keller Williams Realty. Formerly with Coldwell Banker, she is a certified Seniors Real Estate Specialist. For the past two years, she has been named to the Circle of Excellence with the Washington-Greene County Association of Realtors.

Hal Martin has joined Howard Hanna Commercial Real Estate Services as a sales and leasing associate. He has more than 27 years of financial and property management experience in construction, distribution and human services. A graduate of Robert Morris University, he was chief financial officer of Lifesteps Inc.

Clinton E. Champagne, president of Champagne Appraisals, has earned the SRA designation given by the Appraisal Institute for appraisers involved in the valuation and analysis of residential real estate.

To receive the designation, an appraiser must provide a written demonstration appraisal report and accumulate 2,000 hours of qualifying experience beyond state certification requirements.

EVENT

Coldwell Banker's Route 19/Galleria office is collecting items this month to ship to soldiers in harm's way.

Canned and packaged food and drink, toiletries, batteries, single-use cameras and other items can be dropped off at the office, 1539 Washington Road, Mt. Lebanon. No candy or glass bottles, please. If you are unable to drop off your items, call 412-344-0500 and someone will pick them up.

Donors also can supply the names and addresses of soldiers and they will receive a package. Checks to cover postage costs can be made payable to American Legion Post 51.

DEVELOPMENTS

Thirty-six single-family homes are being built by the Totteridge Golf Course in a new development, The Village of Banbury at Totteridge.

Phase 1 will include 21 houses located by Holes 3 and 4 and starting in the $500,000s.

Villas and carriage homes are also available.

Amenities include a clubhouse, a pool and views of the nearby Laurel Mountains and Chestnut Ridge.

Howard Hanna is the marketing agent.

For more information, call site coordinator Doreen King at 724-837-5131 or www.howardhanna.com.

Georgetown Square, a new townhome development in Cranberry, is offering $5,000 in free upgrades to buyers during February.

Brick townhomes start at $332,000 and are available in two- or three-story layouts, with three bedrooms and 2 1/2 baths. Amenities include first-floor master suites, two-car garage, gas fireplace and second-floor laundry.

The New Homes division of Coldwell Banker is the marketing agent.

Real Estate People: O’Leary joins Preferred Properties

Preferred Properties of Asheville has announced that Vicki O’Leary has joined the company at the South Asheville office.

O’Leary has a degree in business administration from the University of Southern Maine. She has been a real estate agent in Asheville for more than two years, specializing in residential sales and relocation.
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Realty World gets new owners

Realty World-Heritage Realty is under new ownership. New owners Tom and Christine Mallette bring diverse backgrounds and education with them. The company will continue to be at 1986 Soco Road in Maggie Valley.

The Mallettes moved into real estate careers at Realty World-Heritage from positions at Western Carolina University. They came into the real estate business with an eye on future ownership of their own company.
Pressley graduates from Institute

Richard Pressley, owner/broker of John Carroll Realtors, recently earned the professional designation of

Graduate, Realtor Institute.

Graduation from the program requires completion of more than 90 hours of course work and 12 examinations on various aspects of the courses taken.

The Realtor Institute is co-sponsored by the North Carolina Real Estate Educational Foundation and the North Carolina Association of Realtors.
Metcalf wins holiday sweepstakes

Seth Metcalf, a broker associate with Beverly-Hanks & Associates, won the holiday sweepstakes for realtors held at the Biltmore Farms main office in South Asheville.
Ward awarded ABR designation

Cindy Ward, co-owner and broker of Weaverville Realty, recently received the accredited buyer representative designation from REBAC and the National Association of Realtors.

ABR is the benchmark of excellence in buyer representation; designees must complete a comprehensive course in buyer representation and an elective course focusing on a buyer representation specialty, as well as verify professional experience.

Harrison given award by firm

Sperry Van Ness, a commercial real estate investment brokerage firm, has recognized Tim Harrison as a Sperry Van Ness Achiever Award for closing 17 transactions in 2006.

What is the best way to make money in real estate?

What is the best way to make money in real estate? Buy quality properties without using any of your own money!

I don’t mean that you should take over a lot of Junker houses using no money down techniques. Many of these techniques are simply gimmicks that make you the owner of an over priced property that nobody else wants.

I mean use proven techniques to leverage lines of credit to buy good property. If you are using unsecured lines of credit to get money, you can buy a lot more real estate than you can buy if you only used your own cash.

Seems like a no brainier to recommend that people buy 2 houses instead of one, but you will meet people that still believe that it’s a good idea to use ONLY their own cash buy real estate.

How much real estate could you invest in if you never needed to use your own money?

The rich get rich because they control more assets than we do. They buy 5 good investment properties to every 1 that we buy.

Everyone historically makes money in real estate - the rich just make a lot more because they own a lot more. And they buy all this real estate using lines of credit.

This is simply called using leverage not cash to invest in real estate. But the opposite of using leverage is to pay ALL cash for property and own it free and clear.

Why do some people still want to own real estate free and clear?

Because they believe that they are making more money if they borrow as little as possible to buy it.

But lets look at 2 examples to see which example makes more money.

Example 1.

Use $40,000 of your personal savings to buy a house with 20% down and get a mortgage for the rest.

You may cash flow $400 per month with this scenario.

And on this one house you will also be getting -

A. equity build up like a personal saving account as your tenants help you pay down the principal on the mortgage each month..
B. appreciation as the house goes up in value, which good real estate has always tended to do.
C. great tax deductions that will lower your personal tax bill in many cases.

Example 2.

Use a $80,000 new business line of credit instead of your own CASH and buy 2 houses.

You may cash flow $200 per house per month for a total cash flow of $400 a month.

And you are making money on TWO pieces of investment real estate instead of one.

Your also getting -

A. Double the equity build up.
B. Double the appreciation.
C. Double the tax deductions.

AND YOU NEVER USED A DOLLAR OF YOUR OWN CASH. The entire down payment came from an unsecured new business line of credit!

I can show you exactly where and how to get MONEY to do this using my Ultimate real estate investor’s guide system.

You don’t need any income, assets or good personal credit to get this money if you follow my 4 step system and use the list of lender that I give you.
——————————————————–

There are other simple ways to do this no money down stuff and get FOUR houses instead of just two.

For example, another simple way to do no money
down real estate deals is by getting your
credit score to stay above 680.

Then you can find a good mortgage broker that
offers 100% LTV real estate
financing to the clients that they work with.

And make sure that they have closed this kind of loan recently with a REAL client. You want to know that they have experience closing these kind of loans.

Forget about your bank. Find a mortgage
broker that has already done 100% LTV loans.
Don’t let them tell you that they can do it. Make
sure you verify that they have already done it
many times.

Next, write your purchase agreements with
wording on the addendum that states that the
deal is -

SUBJECT TO SELLER PAYING $4000
OF THE BUYERS CLOSING COSTS.

Now you have reduced your cash needed
to close by $4000 if the seller accepts.

If the seller says NO. Just tell them you will
raise your offer by $4000 so that they can
pay your closing costs.

Finally, if you are making offers on real estate that
has rent paying tenants. The seller
will be giving you the rents and damage
deposits when you close the deal.

When they turn this CASH over, you can use it to pay for the property in most cases.

But the best NO MONEY DOWN system for investing in real estate is my Ultimate real estate investor’s guide.

Go see why thousands of people all over the country are raving about my Ultimate real estate investor’s guide which is found

—————————————————-

Check out the ULTIMATE NO MONEY DOWN
real estate system and learn how to…

1. Get a HUGE new business line of credit. Up to $200,000

2. Do legal simultaneous double escrow real estate closings and flip property so you can put the profit straight into your pocket.

3. Set up passive real estate partnerships. And learn how to use other peoples money - not your own to invest.

4. Calculate the profit in a deal before you make an offer.

5. Improve your credit score so you can get the best terms and you can make more money.

The Ultimate real estate investor’s guide is money back guaranteed and available at

Remember that only thing that can stop your financial success is -

Lack of knowledge.
Lack of capital.
Lack of a mentor.

I can give you all these tools in my investing system.

YOU ONLY NEED ONE GOOD IDEA TO GET RICH.

And this is IT!!!

You know that real estate has proven to be the safest
investment in any type of market.

That’s why you make money in real estate
no matter where you live and no matter what
kind of interest rates prevail.

Real estate investors make money because they control an asset. The more you control - the more profit you make.

In the real estate business they say -

Good times are good for investors.
Bad times are good for investors.

Home sales down for 8th consecutive month

Home sales are down for the eighth month in a row, compared with the same month last year, according to figures released by the North Texas Real Estate Information System.

Sales of existing homes are suffering as the market contends with an oversupply of housing stock, said Ted Wilson, principal at housing analysts Residential Strategies in Dallas. Those homes were built when the housing market was roaring with record home sales.

Now, builders are pulling back on the number of homes they are starting, which should be good news for homeowners who are looking to put homes on the market as the weather warms up.

"The inventories haven't been outrageous, it's just that there's so much inventory that it's hard to get attention," Wilson said.

There were 4,859 homes sold in the NTREIS' 29-county area, which stretches from north of Waco to the Red River. That's down 4 percent from January 2006. Homes are sitting 4 percent longer on the market than they were the previous January, too. The average house now sits on the market 81 days, the figures show.

"There has been no pressure on housing, because there has been so much inventory out there," Wilson said.

Buyers are looking for homes that are well-maintained and are up to date, said Catherine Taylor, vice president at Helen Painter Group Realtors. Those homes don't last long, she said.

"People pay high dollars for homes they can move into right away," Taylor said. Her office sells Fort Worth homes that are within a 20-minute drive of downtown.

Homeowners shouldn't expect the fall in prices that they might be hearing about on the East and West coasts, Wilson said. Because North Texas did not have the big run-up in appreciation in recent years, it's very unlikely that they will come down significantly now.

What North Texas is seeing now is a plateau as the market catches up with demand.

The median home price in North Texas is $139,950, according to NTREIS. That's 1 percent less than what the prices were like in January 2006. Overall, the drivers that stoke home sales, such as job growth and consumer confidence, are still strong in North Texas.

"Our problems are stemming from too much capacity and too much inventory," Wilson said.

Real estate agency biz is coming of age

BANGALORE: Your typical neighbourhood real estate agency is a dingy, 10ft X 10ft place, with a cheap tin board outside proclaiming its status as a real estate agency.

It often doubles up as a photostating service or a travel agency. There will be just this one guy, who will provide you info on places available and take you there.

If you do rent the place, he'll charge you a month's rent as fee, and, if the houseowner too has asked him to look for a tenant, he'll charge the houseowner a similar amount.

That's the last you'll probably see of him, and, effectively, you pay him a handsome sum for having taken you to a neighbouring location.

Not surprising that many customers end up feeling more than a little cheated, and never quite sure if they negotiated the correct rent.

But now, like many other areas of retail, the real estate agency business too is beginning to get organised. Foreign players are entering the business, and many of the bigger independent local agencies are coming together to form national and international networks.

These are bringing with it codes of ethics that could provide comfort to customers, and lots of value adds that could enrich the experience of a house buyer, seller, owner and tenant.

"Almost 75% of all real estate deals in India is residential. Yet, we do not have organised players in this area, like there is in commercial buying/leasing, where you have the likes of CB Richard Ellis and Jones Lang LaSalle," says Ramneek Bakhshi, the Indian master franchisee for L J Hooker, an Australian real estate franchising organisation that plans to set up a countrywide network of neighbourhood real estate agencies.

Farooq Mahmood, president of the Bangalore Realtors' Association, is busy setting up the India chapter of US-based National Association of Realtors (NRA).

Mahmood says the NRA, which has presence in some 50 countries with 1.3 million members, will not just bring more convenience to customers, but also a strong code of ethics.

"It mandates that the agency be a taxpayer, must have an office, should not have a criminal record, should not deliberately mislead the client on any matter, and a whole lot of other things," he says. The India chapter hopes to bring in some 5,000 domestic agencies as members.

These initiatives will enable someone in US, who plans to buy or rent a house in Bangalore to approach his local (US) agency, who will immediately connect with member agencies in Bangalore to find the required property.

More professional agencies are also becoming full-service outfits - that manage the entire requirements of a house owner who, for instance, does not reside in the same city.

Everything from finding tenants and collecting the rent to paying the taxes and bills, and doing repairs. And payments for finding a tenant will be collected only from either the house owner or the tenant, not both.

"Many houses are locked up because of houseowner worries about how to remotely manage the place. It's a big thing for people to have the right people managing their big ticket item in life - their house," says Warren McCarthy, CEO of LJ Hooker.

Flying dirt, rising oceans and real estate

Just finished reading The Worst Hard Time, Timothy Egan’s award-winning chronicle of the Dust Bowl, and couldn’t help noticing the real estate angle. worst hard time.gif

To summarize in three sentences: Uncle Sam kicks the Comanches off the High Plains and invites in farmers. Strong demand for wheat lures speculators (sort of like day traders in 1999 and real estate flippers in 2004) who plow under millions of acres of grasslands. Wheat market collapses, drought kills crops and the denuded earth takes flight.

Long after the Dust Bowl ended, Plains real estate remains a tough sell. Some burgs in Kansas, Nebraska and Wyoming are so desperate for residents they’re offering free lots to people who move in. Check out KansasFreeLand.com for examples.

And while we’re on the topic of environmental disasters that affect real estate prices, Business 2.0 offers this report on how entrepreneurs are girding for rising sea levels. Floating houses and underwater condos, anyone?

Making Every Pixel Count

IN real estate, a picture can be worth more than a thousand words. Much, much more. When selling properties online, agents and Web designers say that the pictures buyers see of houses and apartments for sale are often the first — and sometimes the only — chance for a seller to make a good impression. Less-than-flattering pictures can turn buyers off and lead to lonely open houses.

“Good photos will grab people’s attention and help you sell a home,” said Jacky Teplitzky, an executive vice president of Prudential Douglas Elliman Real Estate in New York. “Bad pictures will absolutely give you trouble, because you won’t have any calls on it, and nobody will come to see it.”

Eighty percent of people across the country who bought a new home last year used the Internet while house hunting, and they rated photographs as the most useful tool in their search, according to a survey of buyers and sellers by the National Association of Realtors. The survey also found that 24 percent of home buyers got their first glimpses of their new homes on the Web, up from a mere 2 percent in 1997.

In many cases, it is the agents themselves who are snapping the pictures and posting them on the agency Web site. Because of this, it is important that sellers choosing an agent know who will take and pay for the pictures and whether a professional photographer is available.

“It’s so important to have photos that are professionally presented,” said Rosalind Clarke, a senior sales associate with the Corcoran Group in Palm Beach, Fla.

She added that she uses only pictures taken by professional photographers, because “if things look shoddy or unprofessional, not only are buyers going to find the property unappealing, they’re going to associate you with being shoddy and unprofessional.”

Real estate agents who represent large and expensive homes say that virtual tours, which to provide a 360-degree view of a room, are another crucial tool for attracting buyers. “They’re a really great way of seeing a property without actually being there,” said Meredith Maxfield, a sales associate with the Briggs-Freeman Real Estate Brokerage in Dallas. “Buyers use them to narrow out the properties they would absolutely not want to see.”

The Realtors’ association survey found that when it comes to Web features that buyers considered “very useful,” 83 percent cited pictures, 81 percent cited detailed property information and 60 percent cited virtual tours.

New York City is something of an anomaly in this case. Real estate agents here generally agree that floor plans are more useful than virtual tours, because understanding the way rooms flow within an apartment’s limited space is often more important than getting a panorama of any single room.

But there is little point in having good photographs or beautifully written prose describing a home if you don’t have a Web site that is easy to find and easy to use — and this holds true whether you’re using a broker who will list your home on an agency Web site or you’re trying to sell your home yourself and are creating your own Web site or listing your home on a site like Craigslist.

“The key to any successful Web site is to make it easy to find what you want; otherwise, the user will just go away,” said Staci Roberts Beam, the director of Web communications at Northwestern University. “So in the case of a real estate site, make sure the architecture of the site tells you that even if it takes three or four clicks, you’ll eventually get to see an affordable house in a place where you might want to live.”

The Pictures

Unless you are selling your home yourself, your real estate agent will ultimately decide which photographs will go up on the agency’s Web site, but agencies vary greatly in their policies on pictures. Some send their agents and brokers out armed with digital cameras, but others use only pictures taken by professionals. Still other agencies let brokers decide whether to take their own pictures or pay a fee to use the agency’s recommended photographers.

All of which explains why there is such a wide range in the quality of photos found on real estate Web sites.

“When you look at the difference between professional photos and ones taken by brokers with digital cameras, it’s not hard to see that you get what you pay for,” said Lauren Cangiano, a senior vice president of Halstead Property in New York.

Halstead uses only professional photos, and its agents reimburse the agency from their commissions after the properties have sold. The same pictures will be used on information sheets, in the agency’s storefront windows and in advertising brochures.

“Professional photographers have top-of-the-line equipment, and they have an eye for making a place look its best,” Ms. Cangiano said. Their equipment can include a high-resolution digital camera, special lenses, a tripod and lighting equipment.

When real estate agents hire photographers through their companies, they pay the fee, which can range from $100 to a few hundred dollars, depending on the size of a property.

In New York, hiring a professional photographer on your own can run to $1,000 or more, depending on whether you want prints as well as Web photos or if you want extremely high-resolution pictures.

Since the photos are meant to be a sales tool, they will probably not showcase a property’s negatives. Diane Ramirez, Halstead’s president, said: “Our Web site is going to be the face for your property, and we’re not going to put you up there without your makeup on. We’re going to make sure you’re ready for your photo opportunity.”

But while agents will help by urging owners to get rid of clutter or by bringing in flowers to add color, most advise against making a property look better than it really is.

“Every apartment has a birthright to have its best features shown,” said Mark Neuwirth, a senior associate broker at Bellmarc Realty in New York. “But you can’t be deceptive. If you take a shot that’s not within the realm of reality, buyers aren’t going to talk to you when they come and see it, and they’re going to distrust the whole process.”



Still, there are some common mistakes that brokers and sellers make with photos: taking pictures on a rainy day or at night, for example, or photographing a room that is too cluttered to actually show the space.

Mr. Neuwirth takes his own photographs, but he has bought high-end equipment and will spend hours trying to capture the perfect angle “to make sure the pictures tell the story the right way.”

He tries to take pictures using as much natural light as possible. “Shooting at night is always a mistake because the light will come out dreary, and a flash that bounces off a window is just horrible,” he said.

When it comes to clutter, Ms. Maxfield, the Dallas agent, said she does a preliminary walk-through with a dispassionate eye at every home, sticking Post-it notes on every item that she thinks the seller ought to get rid of before pictures are taken.

“I tell them, ‘I know this is how you live normally, but you can’t live like this for the pictures,’ ” she said. “The focus has to be on the beauty of the property and its features, not on what’s in it.”

But there is a fine line between showing a place off and making it look like something it isn’t. Ann Rothman, an agent with Bellmarc in New York, said that when she was trying to sell a two-bedroom apartment in 2005, she had initially taken her own pictures. But then the agency decided that it wanted to picture the apartment in an advertising brochure, so it sent in a professional photographer.

“The professional used a wide-angle lens and made the living room look like a ballroom, and it really wasn’t like that,” Ms. Rothman said. “So people were very turned off when they came and said things like. ‘Where’s the rest of it?’ ”

The property eventually sold after she put her own, more modest, pictures back up on the Web site.

The Words

Once you’ve caught a buyer’s eye with the pictures, you have to reel him or her in with the written description. Some real estate agents say that over-the-top superlatives like “XXX Triple Mint,” followed by a string of exclamation points, can actually drive buyers away. On the other hand, words that are more descriptive and that give a better sense of what a home looks and feels like can be very inviting.

But one broker’s idea of a cliché can easily be another’s idea of poetry.

“I’m not a writer, but what I try to do to set myself apart is write descriptions that somehow evoke a feeling instead of just describing a space,” said Ms. Cangiano of Halstead. So a high-rise apartment becomes “contemporary yet classic,” and the galley kitchen “spills onto a windowed dining room.”

Robert Schulman, a senior managing director of Warburg Realty in New York, said the text should walk people through the apartment in words and help them understand what they saw in the photos, but without exaggeration.

“Everybody knows you’re selling, but you dilute yourself when you use too many superlatives that are common,” he said. “Like what does ‘triple mint’ really mean?”

There are some common buzzwords that brokers have trouble avoiding because they are used to soft-pedal a home’s negatives. Words like “cozy” and “charming” are often used for small spaces, and “private” and “quiet” usually means an apartment faces the back of a building and has no views.

“Of course, you’re not going to say an apartment is dark as a dungeon,” said Alan Nickman, an executive vice president of Bellmarc. “You say it’s quiet and private because you need to indicate what it really is, but you don’t need to overemphasize the negatives.”

Ms. Clarke, the broker from Palm Beach, said some words like “estate,” “mini-estate” and “European” can breed suspicion and should be avoided. “I’m from England originally, where an estate is about 100 acres with a beautiful mansion on it, but here, brokers will call something on a 100-by-125-foot lot an estate,” she said.

Others will describe something as European to give it cachet, she said, “but I’ll go in with a European client who will raise their eyebrows and say, ‘This broker has obviously never been to Europe.’ ”

Buyer Beware

Real estate agents said there were a few marketing tricks they might use for a home that needs work or otherwise just doesn’t photograph well.

“I’ve represented dreck in really drecky buildings,” Mr. Neuwirth said. “For those, we might include a picture of something in the neighborhood that looks good” or just an exterior shot of the building. So buyers who come across listings that have only one or two photos should be prepared to ask why there aren’t more. The answer could be that the broker is waiting for professional photos to be shot, or it could be that the property is a real fixer-upper.

It also doesn’t hurt for buyers to read descriptions with a skeptical eye.

When faced with a property that might have limited appeal, Mr. Neuwirth said, he will use words that address the home’s shortcomings and that might attract a certain customer — words like “pied-à-terrific” and “Tyrannosaurus wreck.”

But listings are often not quite so forthright. So bear in mind that extremely vague descriptions could translate into a home that hasn’t been renovated in decades or has other weaknesses. Something described as “a gem” without reference to any jewel-like qualities could mean it’s small. Likewise for a property that is “cozy” without reference to a wood-burning fireplace.

User-Friendly Web Sites

If you’re looking for a broker to help sell your home, one of the first things you should do is visit the agency’s Web site and travel through it as if you were a buyer.

“By looking at a Web site and how much they put into marketing a property online, you can pretty much tell the level of service you’re going to get from that agency,” said Ms. Maxfield, the Dallas agent. “You want the site to be very sophisticated, very interactive and easy to navigate.”

A good site will have many roads that can lead buyers to it, said Ms. Ramirez, the president of Halstead. Her company’s site, she said, is linked to many other sites, including ads on local newspapers’ Web sites and on search engines like Google and Yahoo.

“You want to be on as many sources as you can that will lead people back to the seller’s property,” she said. “That’s the kind of Web presence that will attract buyers.”

Ms. Beam, the Web communications director at Northwestern, said that a good site also doesn’t “do stuff that is annoying — things like pop-up windows or design elements that look like advertisements.” She also warned against using sites that have information that can be accessed only with technology that not every user might have, like Flash software or very specific media players.

At the same time, since Web technology is constantly improving, it’s important to have a site that doesn’t look dated and that stays current with widely used Internet tools. Shaun Osher, the chief executive of Core Group Marketing in New York, said he recently redesigned his firm’s Web site to make it easier for his brokers to input information and for buyers to use.

To that end, he said, he decided to put the site at the fore of technology: it’s now one of the first in real estate to incorporate the Internet phone service Skype. The service allows a buyer who likes a listing on the site to have a live chat with a broker about the property or to send the broker an instant message. This works as long as the broker is online or carrying a BlackBerry.

“We don’t want people to have to pick up the phone to call because they can get distracted,” Mr. Osher said. “This way you can get in touch with us directly from the Web site, and you’re able to get instant gratification.”

The Latest Technology

Real estate Web sites have changed significantly in the last 10 years, and new technology is sure to continue to change the way property listings are presented on the Internet. Virtual tours and video slide shows, for example, have already led to the use of videos, complete with written scripts and background music, to showcase and describe listings.

Until about five years ago, most Web sites were little more than billboards for advertising the virtues of different agents and brokers, but they have evolved into sites designed to help buyers search for a new home, said Mark Lesswing, the chief technology officer for the National Association of Realtors.

At first, the focus was mainly on putting as many listings as possible on a Web site, he said. But now agencies are shifting gears and trying to provide additional tools that will help buyers analyze the information provided by the listings. That means including maps that can help a buyer figure out which neighborhood schools provide special-education services or showing house values and average taxes paid in an area.

“The trend is to provide information that helps consumers get a real sense of the neighborhood,” Mr. Lesswing said.

Next on the technological horizon is electronic transaction management, a service that allows brokers and buyers to track and complete a sale electronically, from the moment a contract is signed until the deal’s closing. A broker essentially creates a Web site where all the parties involved in a sale — from the appraiser and surveyor to the termite inspector and lawyers for every party — can file their reports. So instead of having to send legal documents back and forth, buyers and sellers can scan their information and post it on the Web site.

The posted documents include the purchase agreement, disclosure forms, appraisals and inspection reports. Companies that provide the transaction service use a variety of security measures to make sure the information remains confidential.

Buyers and sellers would still have to schedule a closing to sign all the documents, but that could happen just a few days after an offer was accepted, not weeks later.

Mr. Lesswing said only a few hundred out of more than 20,000 real estate agencies across the country now use an electronic transaction system. “It’s really a consumer convenience, but there’s still huge reluctance on the part of consumers to putting their personal information online,” he said.

“But the reluctance is very generational,” he added. “The younger generation of people who were raised on computers would use it in an instant, and a lot of them are just about getting old enough to become home buyers.”

PARK AVENUE CONDOMINIUM (Upper East Side)

Listing ID: 433672
Last updated: 2/6/2007
Type: Condominium
Price: $8,750,000
Maintenance/CC: $3,360
Monthly real estate tax: $2,154
Approx. square footage: 3,034


Type: Maisonette
Rooms: 6.5
Bedrooms: 3
Bathrooms: 4.5
Library: Yes
Outdoor space: Terrace
Woodburning fireplaces: 1
Air conditioning: Central Air


Period: Pre-War
Built: 1911
Building Type: Hirise
Doorman: Yes
Attended lobby: Yes
Concierge: Yes
Health club: Yes
Storage available: Yes
Pets allowed: Yes

Be the first to own this lovely Maisonette in the newly transformed Prewar Condominium located in the heart of the Upper East Side. From the restoration of its façade and creation of a new lobby in Greek Revival style, 823 Park Avenue boasts the finest finishes and amenities to match its coveted address. Full service concierge, 24 hour doorman, French limestone lobby, herringbone oak floors, mahogany windows, health club, wine storage in cellar, mahogany paneled Library, Waterworks bath suites and Viking and Subzero appliances, not to mention your lovely garden, are only a few of the luxuries you will enjoy in one of only 12 residences to be completed in early Spring 2007.

Playing the Real Estate Game

The bidding war for Equity Office Properties (EOP) finally came to a conclusion yesterday, but will this also bring to a close the incredible price run for commercial real estate properties and REITs? Some believe this record-setting $39 billion buyout will mark the top for this sector, which, as measured by the iShares Dow Jones Real Estate Trust (IYR) , has gained some 90% over the past two years.

REITs have obviously performed well, but one of the biggest price drivers has been takeover activity, which has pushed valuations to frothy levels. With the Equity Office deal complete and the bidding for Mills (MLS) nearing a conclusion, one has to wonder if, now that returns on investments are less attractive, the takeover activity and the accompanying rise in prices will cease.

The End Is Near, Not Here

However, many analysts argue that while the boom may indeed end eventually, the time is not now. In fact, some make the case that the cash buyout for Equity Office, which takes it private, will spark the shares of many other publicly traded REITs.

They point out that nearly half of Equity Office's shares were owned by funds with a dedicated allocation to the sector, meaning that about $18 billion needs to find a new home quickly. In addition, Equity Office was the second-largest component of the IYR, representing 4.8% of the exchange-traded fund.

Some evidence of this reallocation could be seen yesterday as shares of Vornado (VNO) , the loser in the bidding war, jumped almost 7%.

There certainly seems to be plenty of money still looking to be invested in commercial real estate companies, but I believe the gains in price will slow. In fact, I see a good chance for a pullback at some point in the next few months.

Options Play Can Deliver Returns

Without trying to time the market too finely, here's one way to play the scenario of further near-term price gains followed by a correction. You could use options to employ a form of a calendar spread in the IYR.

Specifically, I would look to buy the March $96 calls for about $1.25 per contract and simultaneously sell the same number of contracts for the September $100 calls for around $3 per contract. This creates a diagonal calendar spread for a $1.75 net credit.

The position would benefit from a near-term rise in the share price of IYR. The plan would be take profits on a near-term rally by selling the March calls before their expiration and remain short the September calls on the belief that IYR will not go much above the $102 breakeven point, or about a 10% rise from current levels.

If you want to avoid having a naked short position, you could buy a higher-strike call in the September options to create a vertical spread. This would be a limited-risk bearish position.

Since both the calendar spread and the vertical spread are net credit positions, they would both benefit from time decay -- that is, you could profit even if shares of IYR remain around current levels or even move moderately higher but remain below $100 before the September expiration.

Real Estate Commissions Around The World

What is a fair real estate commission? We don’t know, but here’s how some other countries break it down. The data is from a 2002 article in The International Real Estate Review (pdf here). If you know the going rate in other countries, please let us know in the comments.

Hong Kong: 1% (lowest in the world)
United Kingdom: 1-2%. In very competitive areas .5- .75%.
Netherlands: 1.5-2%
Ireland: 1.5-2% in the cities & 2-3% in the small towns
Norway: 2-3%
Denmark: 2-4%
Singapore and Japan: 3%
New Zealand and South Africa: average 3.14%
Malaysia: 3% on the first 100K and 2% on the balance thereafter
Australia also uses a scaled system: 5% on the first 18,000 & 2.5% thereafter
Greece & Israel: 4% split between buyer and seller
Italy: 4-6% split between buyer and seller
Canada: 3-6%
Germany, Spain, Thailand, Indonesia, Sweden, Caribbean, Philippines: 5% or less
Finland is interesting: 5% for condos and 3-4% for single family homes
France: 5-8%. There is no MLS in France, but there is that darn VAT (wonder who pays that?)
Mexico: 5-10%. Mexico has an MLS system.
Russia (hold on to your hat): between 5-15% with the average around 10%. In St. Petersburg and Moscow, the commissions are over 15%. There is no MLS and public information is scarce. It is no surprise that FSBOs are very common. (This might be a good advertising venue for agents whose markets have a high Russian immigrant population.)

Real Estate Agency Says They Were Misinformed

A Sherman resident thought she was being de-frauded by a real estate agency, but now, it seems it may have just been a misunderstanding.

Wednesday night KTEN reported that a Durant real estate agency contacted Nancy Mahan about some property she owned in a community called Oakridge estates. Nancy Mahan told KTEN when she met with the real estate agency they told her she owed no back maintenance fees on her property, even though she believed she owed back fees. Ms. Mahan was worried the real estate was trying to take her property and leave her with payments on land she no longer owned.

On Thursday KTEN learned that was not the case. The real estate agency says they were told by Oakridge Estates over the phone that Ms. Mahan owed no fees and relayed that information to her. After following up with Oakridge, the real estate agency learned that they were given the incorrect information. Ms. Mahan did in fact owe back fees.

Martin VanMeter told KTEN, "This is a case of misinformation and not understanding the procedures on her part, Ms. Mahan's part, plus getting some bad information when we contacted Oakridge to see if Ms. Mahan's lot was cleared or not."

The real estate agency says they now require a statement in writing from developments, like Oakridge that says if a property owner owes any back fees before they proceed with any transactions.

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Home sales may be slowing, but real-estate funds pay off

If you've tried to sell your house recently, you may have noticed that many of your neighbors have, too. You may notice, too, that the signs outside their houses say things like, "Price reduced," "Seller pays costs" or, "Come in and smell the air of desperation."

So, it may surprise you to know that while the residential market has been sluggish recently, real-estate funds have soared an average 35 percent the past 12 months. Will they sustain that pace? Not likely. But bold investors might be able to enjoy solid gains in real-estate stocks or a real-estate mutual fund.

Good diversifiers

Real-estate investment trusts, known as REITs, are in the business of buying and selling commercial real estate — apartments, shopping malls and even self-storage units. Some REITs also finance real estate. By law, REITs must distribute at least 90 percent of their taxable income to shareholders.

REITs have some attractive features. First, they're good diversifiers. The commercial real-estate market doesn't correlate very closely with the stock market. So, by investing in REITs, you own an asset that might rise when your stock holdings fall.

Investors also are attracted to REITs' towering dividend yields — towering, at least, compared with the typical stock's dividend yield. The average REIT yields 3.78 percent, according to the National Association of Real Estate Investment Trusts. By contrast, the average stock in the Standard & Poor's 500 index yields just 1.8 percent.

Let's start with the bad news. If the idea behind investing is to buy low and sell high, you have to question the wisdom of investing in an industry sector whose stocks have nearly doubled in three years.

And let's take another look at REIT yields. In January, the average REIT's yield fell to its lowest point since the REIT association began tracking them in 1971.

Why is that bad? A stock's dividend yield is its 12-month payout divided by its current price. Yields haven't declined because REITs have suddenly become miserly in their dividend payouts; rather, yields have fallen because prices have been driven up.

Room to grow

Joseph Betlej, manager of Ivy Real Estate Securities, thinks REITs still have room to grow. Betlej's reasoning:

The economy. The real estate that REITs invest in makes them sensitive to economic changes. In a robust economy — such as we have now — commercial real estate typically fares well. That's particularly true when unemployment is low. The jobless rate in January was 4.6 percent, according to the Bureau of Labor Statistics. Economists tend to see an unemployment rate below 5 percent as signifying a tight labor market.

New money. Hot returns attract new money; naturally, lots of money is flowing into REITs and real-estate funds. Investors poured an estimated $10 billion into those funds last year, says Lipper, the mutual-fund tracker. Assets in real-estate funds have swollen to $84.3 billion, up from $54.1 billion at the start of 2006.

New investors. Private equity funds, which pool money to buy companies, have been snapping up REITs. Three of the five largest REIT buyouts last year were by private equity firms, according to Mergermarket North America, which tracks mergers. Vornado Realty Trust has waged a bidding war with the Blackstone Group, a private equity firm, over a purchase of Equity Office Properties Trust, a larger REIT.

Ken Heebner of CGM Realty thinks some office REITs whose investments are concentrated in growing areas still are attractive. Ivy's Betlej says his largest holding is Simon Property Group, which focuses on shopping malls.

"We saw the regional mall companies become cheap in 2006 as people second-guessed the strength of the U.S. consumer," he says.

They guessed wrong: Consumer spending has been robust.

Berlusconi wants to buy stake in Generali - report

MILAN - Former Italian prime minister Silvio Berlusconi is interested in buying a stake in Assicurazioni Generali SpA, the daily La Repubblica said without giving a source.

The move would enable Berlusconi to take part in deciding the formation of the insurance group's board which is due for renewal in April, it said.

The newspaper said that the investment would be part of Berlusconi's strategy to increase exposure towards financial companies, and his group already plans to increase its stake in Mediobanca SpA, it said.

Berlusconi's holding company Fininvest SpA is largely exposed to the media sector, having controlling stakes in the television group Mediaset SpA and the publisher Arnoldo Mondadori Editore SpA.

Make estate agents sell at your rates

Commission structures do not push agents to seek a higher price. You can change that, writes Rob Stock.

Before he started filming TV programme The School of Home Truths, author Martin Hawes thought real estate agents were "basically good guys".

"Sure I knew there were some bad eggs among them, and I also knew the commission structure through which agents are paid meant there was some game playing going on."

During filming, that view changed.

Now Hawes believes people selling their home need to school themselves up to protect themselves from shonky, self-serving real estate agents, because there appear to be so many.

Secret camera footage for the show appeared to indicate unprofessional behaviour is rife in the house-sales industry, and that's encouraged by the way commissions are structured.

Typically, agents charge commission of about 4.5% on the first $275,000, but only 2% of every $1 they sell the home for over that, and that produces incentives that do not serve the interests of the seller.

"It's the seller who hires and pays agents. Sellers want higher prices for their properties, yet the commission structure that sellers agree on with their agents doesn't give any meaningful incentive to achieve higher prices."

Instead, Hawes says, the bottom-heavy commission structure encourages agents to sell properties quickly, and that can mean compromising on price.

Hawes believes sellers would be better off paying a lower commission on the first portion of the sale price, and higher commission on the extra the agent manages to squeeze out of the buyer.

Hawes says there is no reason why, with so many estate agents compared with house sales, that sellers shouldn't use the negotiating power they have. He says sellers need to agree a commission structure that works for them with the agents, who are desperate for listings.

That can be done only from a position of strength, and that means stumping up the $500 to get an independent valuer to value your home, says Hawes.

Armed with a valuation of say $400,000, for example, a seller can insist on a sales commission of 3% on the first, easily got $380,000. They could then agree to pay 10% on whatever extra is added between $380,000 and $420,000, which is a portion just to either side of the valuation.

Then 15% on anything added to the price between $420,000 and $450,000 and 25% on anything the agent manages to add onto that.

The specific commission structure would have to be worked out by the seller, but, says Hawes: "The important thing is that you work out a scale where the percentage fee rises with the price obtained."

Most real estate agents wouldn't like that, says Hawes, as too much of their commission would be "at risk".

Hawes says a study of 100,000 Chicago house sales shows how badly commission structures serve sellers. It found that when agents sold their own homes, they kept them on the market for 10 days longer than average, and got a price that was 3% higher.

In New Zealand, that translates to about $10,000 per house sale, and as there are more than 100,000 homes sold a year, that equates to roughly a billion dollars lost, says Hawes.

In other words, commission structures clearly motivate agents to sell quickly, at a lower price than they would personally accept.

Murray Cleland, president of the Real Estate Institute, said people needed to realise they could negotiate on commission, but that they had to be realistic.

"If you're going to list your property and the agent won't negotiate with you, go to another agency," he said.

There were significant costs to running agencies, he said, and that was reflected in the common commission structures which rewarded agents more for the first $300,000 or so of sales price, typically about 4%, and 2% on the balance. He said such negotiations on commissions were most common in larger property transactions, such as the sale of farms.

But Cleland said 25 years of experience had taught him that for most people, commission was secondary to service and trustworthiness.

HOW TO DEAL WITH REAL ESTATE AGENTS

Selling a home is the biggest transaction most people will do, so it pays to have a good agent. Finding one is hard, so author Martin Hawes has tips on how to get the person and the contract that suits you.

# Remember, real estate agents "selfregulate". It is hard to get justice if they treat you shoddily, as the Real Estate Institute does not have a good track record of throwing out bad apples or ordering reasonable compensation to those its members have wronged. Do your homework on who to trust.

# Do not try to please or befriend the agent. They are a professional you are paying. Many have their own agendas, so trusting them and letting slip information such as your willingness to move on price could result in them using it against your interests to get a quick sale.

# Beware the "big lie". An agent will often inflate the price they say they can sell someone's home at to get the business, and then sell it for much less. Get an independent valuation before interviewing agents. If they quote huge, unrealistic sums, be suspicious.

# Interview several agents and make sure they know you are doing so. Take notes, and be sure to understand who they are, their track record, their understanding of who will buy your house, their advertising strategy and their sales methods.

# Don't just hand over large sums for advertising. Ask what the advertising is for. If a third of an advert is the estate agent's brand, make them pay for that. It's not your job to build their brand awareness.

# Sign nothing before thinking carefully and getting advice. There's no reason why sellers should accept "standard" contracts. They are selling your home. Feel free to agree on how they do it, and how they will be paid.

# Remember, a fee of $15,000 is huge. Make them earn it.