Home Buyers Relocation’s Weblog

Home Buyers Relocation Services:

Our 20^th Anniversary —  Twenty Years on the Road Less Traveled By…. 

(Intended as an overview for new home-buying-client prospects.)

Today - In the Beginning - The Finalized Business Plan and…Clients May Still Expect 

Today, as originally intended, we still are a small, professional real estate agency, practicing a specialty, a service exclusively-for-buyers, primarily in support of in-bound relocating families ….executive, military and otherwise.  Our domain is area-wide, but focused on finer homes in the best relocation venues. Paul and Merrill Ottwein, son and father, are the principles of the company.  Our choice of a business model was very deliberate, carefully matching the service to the specialty.

In January of 2011, we will have been in this niche-business 20 full years, during which time we have not taken a single real estate listing.  But we have served more than 3000 home buyer families with consistent win-win results….our buyer satisfactions are consistently high, and so therefore, are ours.  It’s such a pleasure to serve this classy group, and often, their sponsors as well.   

We’ve had well-appointed offices in two great communities for nearly all of these years,.comfortable, friendly, functional and easy to find.  Paul is the record broker in Edwardsville, Merrill in O’Fallon.

We are not very large…just 6 active licensees at the moment, with another on medical leave, but we consider ourselves an elite highly professional team, on the “high road” of real estate representation.  We’ve always been very focused on quality as opposed to quantity, and will not compromise the overall level of service for the sake of growth.

In addition to the satisfactions born of delivering top service, our reputation is of paramount  importance to us.  The huge majority of our clients are referrals from other clients, or from   companies that we have otherwise served.  

In fact, we have astonishing stability within our staff.  Paul and Merrill have each been here the entire 20 years of course, but three others are all in the range of 15 years to 20 years. (The total years all of us have been in the real estate business here is in the high hundreds).  This kind of stability is unheard of in the profession.  We call ourselves in fact, “disciples” of exclusive buyer representation…we obviously like and respect each other, and very much believe we’re functioning at a very professional level, and that’s satisfaction itself.

In the very beginning, more than 20 years ago,

Paul and Merrill Ottwein, were operating a traditional franchised agency in Edwardsville and doing things pretty much the same as every other realty firm.   But we saw the relocation segment of the

market growing, and over a period of time, we began to consider it more carefully.  Southwest Illinois had become a targeted residential area for the entire

St. Louis area, so it appeared to be a growing opportunity. There was no single agency then devoted to that segment, nor are there any others than ours even now. 

As a market segment, relocating families had, (and have,) attractive characteristics.  They are almost always serious, dedicated buyers, with a short buying-time window.  They tend to buy larger homes.  They are intelligent and educated, and very discriminating in many ways.  They are often very experienced…except they are can be “babes in the woods” in their understanding of a new area. (They therefore are considered a class “vulnerable” to problems with agent representation.)  Their experience often includes some bad events, so many are students of agency relationships.  Finally, we suggest a bit tongue-in-cheek, they are an attractive

market segment because most of the time, they have no cousins in the business.  

We quickly determined that a relocation specialty was worth consideration, but to be done professionally, it would require special characteristics.  So then started the “specification” process for determining the ideal business model.

In approaching that design, we determined the best service would need these characteristics:

            Deep knowledge of the best relocation venues…area wide.

            Experience in the business….area wide.

            A highly professional, even “sophisticated” level of service.

            A deep body of resources, freely delivered long before clients come to town

            A willingness to always commit the best agents to one-on-one

                 service when scheduling actual community visits.

            Probably, a team approach, to pool the experience and knowledge.

            A totally transparent service, full disclosure, absolute loyalty.

            Hospitality that we would want for ourselves….off the chart.

            In service terms, a level greater than common expectations justify.

            In terms of emotions:  ultimate comfort, confidence, convenience

As these studies progressed, it was obvious that whatever good intentions  prevailed, the package could not be consistently delivered without eliminating the potential for conflict, a  policy of NOT taking listings.  (Obviously, there are down-sides to this practice…giving up ali listings the main one, somewhat easy when buyers become sellers.)  

            We considered this most carefully, and did learn that there were a few others around the country experimenting with it.   So our research included ranging a bit to distant places, visiting   with these pioneers.   Adding to the magnitude of change this suggested, real estate service in the entire nation at that point considered itself as serving sellers exclusively, and laws       reinforced that. Adding to the pressure for change was that most buyers thought they were represented but indeed were not.  A watershed study of nationwide consumer attitudes by the Federal Trade Commission in 1983 found that over 80% of all buyers thought they were being  represented, but in fact, were not.

 

            Finally, we carried from the beginning an attitude that if we were going to do it at all, we were going to commit to doing it well, enhancing the differentiation, serving at the highest truly professional level possible.  We felt that clients do know, and appreciate the difference…and they do!

So therefore was the business plan finalized, and it hasn’t been diluted an iota over the 20 years, except that we’ve found additional avenues of service borne of the separation of representation; it’s amazing what opportunities we’ve found in that fact.  The team approach has been totally validated, along with every other facet of the features originally created.  Of course technology has taken us into a new world, although we still adhere to a policy of having a human person answer the phone, forwarding the office phone to one of the principles after hours and weekends and a few other older-fashioned ideas of personal service.

The specification regarding knowledge of the best relocation venues is also enhanced.  We have this wonderful horizontal relationship to the best relocation targets, as opposed to the average agency’s more vertical relationship with a town or two.   No other agency around can touch this team’s approach to knowing this segment throughout southwest Illinois. 

And we’ve refined the higher-level service so that we’ve long delivered “Client-Level Service” according to the old, (still valid) Common Law of Agency.  So it’s become a level of service higher than the current real estate law requires, which calls for “Customer Level Service,” (The tenets of the Common Law of Agency have been, in fact, legally abrogated or attenuated for the entire real estate community.  One state, Oklahoma, even tried to outlaw the higher-level Common Law service, in 1999, which was quickly struck down by their supreme court as a strongly anti-consumer effort.)

             

Of course, at the beginning, it was considered a form of heresy, but we quickly got past the suspicious issues on the part of traditional agencies, and we now enjoy, (cultivate, in fact,) a great relationship with the rest of the real estate world…cooperation to the betterment of both sellers and buyers.

 

In the beginning, we chose to have offices in the two recognized centers of relocation activity, Edwardsville/Glen Carbon and O’Fallon/Shiloh.  The Edwardsville community enjoyed the presence of Southern Illinois University, and O’Fallon nestled next to Scott Air Force Base.   That decision has been very strongly validated, although there are some great smaller communities around too, that offer a different kind of relocation community.   (Glen Carbon was named, in fact, in 2009 as one of the top 100 communities in the US by CNN’s Money Magazine, and Edwardsville was just selected as one of the top ten in the USA as most desirable in which to raise a family, by Family Circle Magazine.)   We’ve greatly appreciated serving the military community from our O’Fallon office, and almost half of our clients have military connections.  

And we had the opportunity to participate locally and nationally in the movement, and especially in the formation of The National Association of Exclusive Buyer Agents.  Formed 4 years after we started our local business, Merrill was a charter member, and in fact, it’s first Treasurer.  Serving on the Board of Directors for more than 10 years, he served as its fourth President in 1998.  We have contributed, and have gained enormously because of this affiliation.  And it’s been a great experience for us, especially Merrill.  (You might google his name sometime.  These affiliations are paramount.)

So the expectations of our buyer clients may exactly follow the specifications outlined in the above text, but we might qualify these facets of service:

            Free access to lots of information early still prevails. Our stuff is constantly under construction with major web site revisions on the way, plus enhanced visibility on Facebook and LinkedIn. We still require registration only where rules require, or for certain proprietary products we’ve developed with other agencies, notably, “Homework” and the “Wiser Homebuying Manual.”

            We’ve developed a detailed set of promises that are sacrosanct.  Among them are the promise to give this higher client-level of service, the promise not to assume a comitment to use our services until agreed, sometimes only after an interview, and a certain list of offenses that “We won’t do!.”  The last is based on the fact that not all deception is active….so we’ve tried to identify some passive forms in a reverse set of promises.

            And early in our practice we added a “no hustle” pledge.  We’ve always felt that decisions needed to be “built” so that when the time comes, they’re natural.  And of course, no one likes to be hurried, or “hustled” into decisions before they’re comfortable.  So for lack of a better term, we have the “No-Hustle Pledge”.  (We admit it’s a bit weaker than the successful “No Wine Before it’s Time” pledge.)  And we do not make uninvited phone calls.

            We quickly and greatly elevated the importance of resaleability in the specs of our relocation buyers.   We consider it, for the whole, and especially the military community, an essential  buying goal.  That’s all consistent with the principle that we believe we set our clients up to  make the most money when they resell the home we help them buy!  (We can’t always promise  big discounts from asking price, but we can promise consideration of re-sale potential.)

            Finally, we’re still committed to one-on-one service with an outstanding, experienced agent while clients are in town.  We schedule an “agent-week”, which usually starts on a weekend, or on Monday, with a week being a good conservative average time for a great search to a good   conclusion, assuming the client does some homework before arrival, easy nowadays.

            But we can’t schedule more than one client per agent, either.  On occasion, even already this     year, we’ve had to suggest an alternative schedule, or a different agent.  And if search times don’t exactly mesh with “agent-weeks”, then we may need to do a bit of tag-teaming with other agents  or sometimes, even refer the clients to another agency, heaven forbid!   So we need to request careful advance scheduling and very much appreciate the consideration.

            There is of course, a certain incompatibility with local clients, who are in and out over a longer period.  While we do take some locals, especially former clients buying another home, we do need to warn them of the potential for schedule conflicts, out-of-towners having preference.

Wow….it seems we’ve covered a lot here, even a recitation of our mission, our policies and procedures and even our intentions.  As we work in our 20^th year, we’re trying to re-work much of our materials, and do hope this is a more interesting way of presenting it.

Enormous thanks goes to all of our former clients, with deep appreciation for their confidence and patronage, and for their many referrals of their friends.  That we recognize as a precious gift and we won’t betray that kind of confidence for anything!  This has been a wonderful journey for us with enormous satisfactions borne of serving simply-incredible people!

 

Paul and Merrill

With increasing frequency, the popular news media are talking about “Exclusive Buyer Representation.     The first 5 below have been published in recent months.

 

There’s also been an interview recently with NAEBA’s president, on Good Morning America.  We should be supplied with a clip of that soon.

But the most recent one indorsement, a very open recommendation from HUD, follows.  Please review it.  Most of us are astonished that HUD first of all knows the difference, but also has the courage to publish it, knowing many main-line realtors will be reading. 

 Applause from Informed Observers: Regularly, there are comments from informed observers in the consumer press that laud the concept of exclusive buyer representation.  Recently, articles have appeared in these publications lauding the exclusive brand of buyer representation:              Smart Money - Newsweek  - USA Today  -  US News & World Report, and Kiplinger’s And….

But in a brand new HUD brochure on “Shopping for your Home Loan”, this text is quoted:

US Department of Housing and Urban Development Releases Latest Version of Shopping for your Home Loan
HUD Booklet advises buyers to search for an agent who will represent their interests in real estate transaction
 
AVONDALE, AZ January 01, 2010 – In its first revision in over 10 years, the US Department of Housing and Urban Development (HUD) advises home buyers that it is their responsibility to search for a real estate agent that will represent their interests. In Shopping for Your Home Loan - HUD’s Settlement Cost Booklet, HUD states: “If you want someone to represent only your interests, consider hiring an ‘exclusive buyer’s agent,’ who will be working for you.”
 
The National Association of Exclusive Buyers Agents (NAEBA) views this as an important element of the new era of home buying.             (Merrill has had a prominent role in the National Association of Exclusive Buyer Agents.  He was a charter member, its first Treasurer and its fourth President…more under “scrapbook”.)
 

End

Wow….are Edwardsville/Glen Carbon ever on a roll!   Big-time publicity for both!  (remember, they’re sister cities and have a common school district.)They both get national recognition for great places to live! First, Money Magazine ranked Glen Carbon among the top 100 places to live in the entire

USA!  (a short resume is below including a link to Money Magazine.)Then, Family Circle Magazine has just named Edwardsville as one of the top 10 cities in the entire USA in which to raise a family!  The entire news story is reprinted below, (which includes links to

Great

Schools and Family Circle Magazine.) 

Best Places to Live - Money’s list of America’s best small towns.   

Glen Carbon Ranked Among Top 100 Best Places To Live in USA    Glen Carbon is ranked among the top 100 best places to live according to (click link) Money Magazine. Glen Carbon, with a population of 12,500, is praised for its wide selection of affordable housing, abundant vegetation, and its strong community spirit. Money Magazine’s researchers surveyed small towns across America, gathering data on their unemployment levels, crime rates, school systems and housing costs. Based on this research, Glen Carbon is recognized among American’s best places to live!   

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(The following is the announcement of the most recent Edwardsville honor, as published in the Edwardsville     Intelligencer, that Edwardsville had been named in the top 10 cities in the nation in which to raie a family….an award from “Family Circle” magazine:)     Edwardsville gets top 10 nod  

District 7 a big selling point   By ANN NICCUM aniccum@edwpub.netPublished: Thursday, July 8, 2010 11:14 AM CDT   The news is spreading about the city ofEdwardsville being named one of the top 10 places across the country to raise a family by “Family Circle” magazine.  

Edwardsville Mayor Gary Niebur was obviously excited about it. “Our community is pleased and honored to receive such distinguished recognition,” Niebur said.  Niebur said the magazine is properly heralded as one of the nation’s leading and most highly respected publications.“  It is one of the largest national magazines with a circulation of 3.8 million and an estimated readership of 20 million,” Niebur said. “This wonderful recognition is a tribute to our residents, volunteers, community and service organizations, service and program providers and our business and professional community.”  

Niebur added, “What we see is seemingly simple: a quiet community that is viewed by others as an amazingly wonderful place. It is seen as one of the country’s 10 best places to raise a family. But, it is actually the product of hard work, constant self-evaluation and the dedicated involvement by volunteers who give of themselves in many, many different ways. Those volunteers offer a community spirit not seen everywhere.” 

Edwardsville/Glen Carbon Chamber of Commerce Executive Director Carol Foreman agreed.“It is nice to receive national recognition for what we’ve always known to be true,” Foreman said. “We at the Chamber are excited that the word is out about Edwardsville.”

Edwardsville School District Superintendent Dr. Ed Hightower said he too was thrilled with the news.“I think most of our residents would agree that this is an outstanding place to raise a family and educate our children.”Hightower, one of a very few around the community who knew the city was being considered for the honor, said the school district was “very involved” in the selection process.Hightower said Family Circle contacted District 7 early on in the process recognizing that a strong school district and strong community go hand-in-hand. However, he did note those involved had to keep the news under wraps, because any leaking of the information to the press or public would have resulted in disqualification from consideration. 

Hightower said that what the Family Circle staff seemed most impressed by, however, was the District’s goal of giving back to the community and the fact that students, parents and staff fully embraced the challenge to do just that.“They were astonished that athletes do volunteer work, performing arts students entertain at senior centers and kids from kindergarten through high school have raised more than $100,000 for local, national and international charities. I think our students commitment to community service really helped set us apart from other communities. We also want to thank the Gianaris family for taking the time to promote our town and our school district,” Hightower said.“District 7 covers 185 square miles and encompasses two suburban communities, several small towns, and a large, unincorporated rural area within its boundaries. We are fortunate to be home to quality communities and quality citizens from border to border. Whenever one of our District 7 communities is recognized, we can all take pride.” 

According to Seema Nayyar of Family Circle, one of the most useful references they found was the District 7’s Web site www.ecusd7.org. Nayyar said it served as a great window into the District 7 community, its students, staff and parents and led the Family Circle staff to the kinds of information that cemented Edwardsville’s place in the top 10.Nayyar also noted the community’s support of new school buildings through building referendums and the philanthropic support of the EGHM Foundation and other private donors that have brought outstanding athletic facilities to District 7. 

Niebur added that the city has been blessed with several quality schools. “This is a community that enjoys and insists upon high quality education for our children. But, we are not only blessed with an outstanding public school system, we have great parochial schools as well. Moreover, we have the tremendous honor of serving as home  to Southern Illinois University Edwardsville and hosting a local campus of Lewis and ClarkCommunity College.”  

Along with Edwardsville, the other cities named to the list were: Edmond, Oklahoma; Hampton Township, Pennsylvania; La Verne, California; Windsor, Colorado; Round Rock, Texas; Simpsonville, South Carolina; Bristol, Rhode Island; Meridian, Idaho; and Bettendorf, Iowa.  

The magazine said the cities were selected based on the results of its exclusive survey to identify the best towns and cities cross the country for families.“The communities featured in the magazine’s annual roundup of perfect places to call home combine affordable housing, good neighbors, green spaces, strong public school systems and giving spirits,” the magazine stated in a news release. 

The magazine said it partnered with Onboard Informatics, a New York City research firm that provides real estate, demographic and other data, to assemble an initial list of 1,700 cities and towns with populations between 15,000 and 150,000. The magazine then selected approximately 800 of the communities with a high concentration of households with an average income of $75,000 and assessed them further based upon which places met their “family-friendly criteria” including affordable homes, quality schools, access to health care, green space, low crime rate and financial stability. 

The cities were ranked based upon the information above and narrowed down to 25 and then they began conducting interviews with school district and community officials and other local residents to determine their 10 best list. In addition, the magazine used Greatschools.net, a nonprofit Web site with a mission to improve education by inspiring parents to get involved, to provide them with the public school ratings used in the town rankings.  The magazine gave the city of

Edwardsville the following ratings: Population: 25,263; Median Income: $63,490; Median Home Price: $152,000; Households with Children: 31 percent; Student/Teacher Ratio: 15:1; and Great Schools Rating: 9 (out of 10).

The magazine also used the story of Ted and Jennifer Gianaris and their six children to illustrate why Edwardsville is a top 10 city for families – from the quality of the schools to the students involvement of in the community to the volunteerism of the community as a whole and the fundraising efforts put forth that have given the community things like its newest YMCA building to the Watershed Nature Center.   Even the Humane Society is mentioned as it is one of many places students from District 7 volunteer.Executive Director of the Metro East Humane Society Charles “Skip” Schmidt said the city is “very deserving” of the award.Schmidt, a long-time resident, has been active in many organizations in the community and most recently was named the director of MEHS, a non-profit organization that serves five counties and is based in Edwardsville.  

As part of the city’s profile, the magazine states, “students from all grades are asked to step up, whether it means visiting senior citizens or walking dogs for the Humane Society.”Schmidt said that is a true statement. He said the community is very supportive of MEHS and the students from District 7 are part of their volunteer base.“  

This is definitely a volunteer community,” Schmidt said.Schmidt said his family was very fortunate to find this community after his wife received a position at SIUE.“We moved here in 1989 to raise our family,” Schmidt said. “We love it here.”  

The magazine also used a photo provided by Edwardsville Police Lt. Scott Evers, who is also know around town for his talent and love of photography.The rankings are available in the August 2010 edition of “Family Circle” or can be currently seen on the Family Circle Web site at www.familycircle.com by clicking on “10 Best Towns for Families: 2010.” 

Could this be the time to buy?

The following article is quoted in its entirety.  It was written and published by Amy Hoak, in Market Watch, recently.  It’s a great summary and we generally agree, except that the comments about new home construction does not prevail in our community.  That was worked off a year ago.  Builders are back to building “inventory” homes, but they are not ahead of the real market at all.Could this actually be the best time to buy? It may be moment you’re looking for By Amy HoakMarketWatch CHICAGO—People are afraid to buy a home in times like these, with the economy tanking and home prices continuing to fall.  But if you’re brave enough to stray from the herd, you might be in for the home-buying opportunity of a lifetime. Ask for price reductions, improvements, closing costs—whatever—and the seller, desperately trying to get a contract, is very likely to work with you, said Jay Papasan, one of authors of the book “Your First Home.”  When the market starts improving, your negotiating power starts to diminish, he added. If you’re qualified to buy a home now, the purchase makes sense for your situation and you’re prepared to live in that home for at least five years, there are reasons why you may be headed for a great deal: 1.  Affordability is better than ever.According to the National Association of Realtors’ housing affordability index, homes were more affordable in December than at any other point since the group started the index in 1970.  The affordability index is a measure of the relationship between home prices, mortgage interest rates and family income. John and Julie Chilman, for example, recently have been able to stretch their dollars in the

Las Vegas area.  The listing price for the five-bedroom home they’re buying was $265,000; they offered $250,000. “Our Realtor was like `Yeah, pipe dream. Like they’re going to take that,’” John Chilman said.  “And all they did was counter $255,000 … and they’re paying all closing costs.” The home had lingered on the market, and was listed for $310,000 just six months ago, he said. 2.  You have a large inventory to choose from.In many places it is taking months to sell a home, creating loads of inventory — from new homes to existing homes to foreclosures.  There was a 12.9-month supply of inventory in December given that month’s sales pace, according to NAR.  A large selection gives buyers more choices and drives down prices.  And home sellers have gotten the picture. 3.  Builders are offering big discounts.Homebuilders are getting even more aggressive with their pricing.  In fact, Fadel recommends looking at completed new homes first because builders are offering such steep discounts.  Plus, you’d have a warranty not only on the home itself, but also on the home’s appliances, he said. 4.   Mortgage rates are historically low.It’s not just the price of the home that will affect affordability; mortgage terms will also affect your monthly payments. 

The Perfect Rainbow, Revisited

This is a re-work of a letter published here last fall, but the sentiment is so appropriate, I thought it justified an update. Of course, you will recall the popular movie of a couple of years ago called The Perfect Storm!   It was an unlikely but memorable name, and The Perfect Rainbow is a lot more positive!  And this is not to say the storm we have had was perfect, but it was a pretty darned good one. So it’s good that we should expect a pretty-darned good rainbow. And that’s what we believe prevails, market wise, so it’s an appropriate analogy.  It’s a bit counter-intuitive, because the media and others have installed high levels of wariness, but we do not recall circumstances any more promising in recent years, and the surge in the market so far in 2010 says that many consumers feel the same. 

·        There is good inventory fromwhich to choose.

·        The values are stable and realistic, and not likely, it appears, to go lower.

·        The asking price versus selling price ratios are getting smaller.

The competition is not yet outrageous, but building.

• Money is easily available, at all-time low rates, (but rates appear anxious to rise.)
• The affordability index is at an all time high.

 

(please pardon the disparity of button size above….I can’t get them = for anything!)Of course we would more than ever recommend great care in buying; to minimize risks and maximize enjoyment and resale.   That is where we come in.  

But we’re envisioning historically “best times to buy” that may not return even in (some of our) lifetimes!   If you want to talk about it with me, use 800-231-5588.

 Merrill Ottwein

New market study and important links.

Here….we simply have two new references for you, to help follow the real estate markets in southwest

Illinois.  And, until we find a place for it on the main site, a new school tool, especially oriented toward the military family.  Here they are: www.YourIllinoisHome.com is a site provided by the Illinois Association of Realtors that follows market trends and has great comment about home buying in general.This is a site produced by the Office of Federal Housing Enterprise Oversight.  They are the government folks that are in charge of the recovery, supervising Fannie, Freddie and all those new tax dollars.  Here is their site, if you have an urge to look inside the whole.   If the URL of the link above doesn’t work, it is www.ofheo.gov/newsroom.aspx.

A great school survey, especially for the military family, is being provided by our friend Cindy Doil, (Rotary-friend that is, our outgoing, wonderful president.)  This should be Cindy’s link, but the url is www.Webpages.charter.net/cdoil.

Then, it was interesting to see that Family Circle magazine, in bestowing the honor of the 3^rd best city in the

USA upon Edwardsville this last week, used

www.greatschools.com for their school data.Thanks….Merrill

Local Real Estate Market Data –

Southwest Illinois Multiple Listing Service First half of 2010: The data below shows we’re normalizing and all moving in the right direction.   Significant, and consistent with what we’re finding locally, the list to sell ratios have stayed about the same, as well as the days on market.    We’re finding that values have really not changed much, (comparing it to national data where reports of continued value losses abound.)  And these days on market for good properties are not significantly different than in boom times…it takes 60-90 days at best to close on a listing.   (There are homes for sale that have been on the market for extremely long periods of time, usually because of problems.  A minimum of those must be included here, or the averages would have been higher.)    

We do observe that the second quarter showed more interest in higher-value homes, probably a result of the termination of the first-time buyer incentives at the end of April.Finally, it’s consistent with our experience that good product, even in these days, does not stay on the market long.  We’ve experienced some competition, even, on these.  We persist in believing it’s truly a great time to buy a home.   Earlier comments about “The Perfect Rainbow” are valid, provided extreme care is used in the purchase process.

So, residential sales for the first 6 m0nths of 2010:

         Madison County sales were up 21.39%

         St. Clair County sales were up 20.24%

The following is now outdated, but we’re keeping it “up” for the moment because military families who have been overseas for 2 years or longer have another year in which to claim the rebate.  If they close by the end of June in 2011, they can still claim it.  Call our office for details if you believe you qualify.

This therefore is old stuff: 

The purchase deadline for first time buyers to reap the $8,000 tax credit is just around the corner, considering it’s harder nowadays to get around the corner!

While this site is intended primarily for existing home buyers that have been clients of ours in the past, and so are homeowners already, almost everyone knows of potential first-time buyers among family and friends, and those are the ones for which this message is intended.For them, the ticking sound is the sound of time creeping up on the expiration of the $8,000 tax credit for first time home buyers.Of course, it is only July and the credit does not expire until Dec. 1.  But unless the federal government decides to extend or expand the credit – kind of a long shot — it may be time for potential first time buyers to get the process started.

First, remember the rule:  it is not that a contract must be signed before Dec. 1 or a loan approved by then. The sale has to close before Dec. 1.But even this scenario is tempting fate, but we believe buyers should have a purchase contract signed by mid to late September, so they have 45 to 60 days to safely close the purchase.  Buyers who want to be in a new home by Thanksgiving need a contract by mid September for sure.

Under normal circumstances, buying a home is a complicated process, particularly after the fun of looking at potential homes descends into financial minutia.  The process is normally difficult, especially for first time buyers, who have not been through the process before.

But that process has become much more laborious in these times.   We have seen all kinds of surprises in the appraisal and lending processes.   One simply cannot count on the old timetable.   New appraisal rules have kicked in and we are seeing St. Louis and other out-of-area appraisers groping for local data and statistics, and taking lots of time.  Lenders are taking lots more time and are being super careful about everything.  Also, it can take significantly longer to get an answer back on an offer for a distressed property than a traditional one.  It seems that everything is dragging out and taking longer.

And we want to be very careful ourselves in supporting the search process, making sure that all viable options are considered, and a comfortable confidence is built.   We still want the usual careful analysis of resale potential for all finalists.

The bottom line is that it is not too early to organize the search and get the financing efforts started.   These two functions need to be considered as on parallel tracks, merged at the moment necessary after the search identifies the single best option. 

In fact, some kind of commitment from a lender needs to be in hand before offers are made.  That is a most important tool for us in making the offer look good to the seller. (Sellers are more careful nowadays, too, as they want a deal that really closes, and closes on time.)  So financing surety up front goes a long way, in building buyer confidence, in making it easier for the sellers to say yes and for the whole process to go smoothly.

Then finally, there is little doubt that the $8,000 incentive is working as intended.  All of us in the business have seen a growing interest in taking advantage of that, so many in fact, that last minute congestion at the closing offices (title companies) could even be a possibility.

So we surely do not mean to be discouraging.  We just want to say that under these modern circumstances, it could take longer than usual to close on a transaction, so it is not too early to get it started.  And while it may be formidable, we are there to make it safe and comfortable.   Like a lot of our most challenging lifetime efforts, the reward will surely be worth it!   We hope you might convey this sentiment to family and friends that are in a position to take advantage of the incentive AND get into a new home by Christmas, or even, Thanksgiving. 

About the “Real Estate Tax Equalization Process”  in Madison

County. 

Recently, the owners of every parcel of real estate in Madison

County received a notice that their assessed value had been increased.   Every parcel has had, in fact, an “Equalization Factor” imposed. 

Edwardsville

Township’s factor was 1.0322, meaning the assessed value had been raised by 3.22%.  (It’s the same process that was performed in St. Clair county about a year ago, and the subject of our Blog # 12, titled “O’fallon Real Estate Taxes”, which is still posted here.)

First, this is in response to state-managed reviews, township by township, which claim that properties have been, on the average, under-assessed, hence the need for the adjustment, across the board to every parcel.  It’s a process that’s legally required in the state of Illinois “quadrennially”…every 4 years.  It’s performed under state supervision by the County

Board of Review, a part of the Treasurer’s office.  (It excludes foreclosures and sales of distressed properties, a controversial provision that’s provided in the law.) 

So what can one do?   The fact is, for this kind of assessment, not a lot.  Ordinary procedures for protesting individual assessments don’t apply here, although they might still be invoked if the overall assessment is simply deemed too high.  Ordinarly, these protests are made on individual parcels after the Assessor does his job and reports to the owner, where objections are somewhat easily filed with The Board of Review itself.  But this equalization process is not in that “ordinary” category. Here, the Board of Review is leveling the “Equalization Factor” against every single property; (In fact, The Board of Review by doing this is indirectly criticizing the Assessor as not having done his job properly…hence the need for the overall adjustment.)  And that makes a great deal of difference in how objections are made: Since The Board of Review is applying the state imposed “Equalization Factor”, an individual owner cannot file an objection with the local board for that reason.  It instead must be done directly with a state agency called, “The Property Tax Appeal Board”, (web site: www.state.il.us/agency/ptab, which web address is on the back of the card.) And the complaint there can only be with the “Tax Equalization Factor” set.  That agency is not prepared to deal with individual assessments otherwise.  In my mind, that makes it nearly impossible, surely improbable, for individuals to win, (visualizing Don Quixote’s “Windmill Tilting”.)   I anticipate that the local Board of Review would also discourage you from making this appeal. 

So this “bottom line”:  Individuals should work through the math and see how it affects them.  Take the assessed value after the equalization factor is applied and multiply it times 3, (because assessed values are 1/3 of real.)  Compare that number with what you’ve paid for the home, or what you think the home is really worth.  In the several cases I’ve worked through, these new assessed values, after “equalization”, are still a bit under the purchase price, making it difficult to lodge an objection.  However if the new assessed value is substantially higher, than I would still go to The Board of Review and file an appeal, (not for the equalization factor, but just because it’s overall, too high.)  You would then need to prepare a presentation for the Board of Review based on “comparables” (valuations of homes equal to yours,) in the ordinary way in which taxes are challenged.  We can help you with this. Sometimes, a “Realtor’s Opinion” will help, (but probably not ours, if we helped you buy the home.)  A purchased appraisal might also help.  We could help select that help. Your protest should be filed with the County

Board of Review, which office is in the courthouse annex at 157 N.

Main, Edwardsville, phone #: 692-6210.  All of the process and the rules are also posted on the county website; www.co.mad.il.us, under  “Assessment Info”.  Or call 692-6210 for some guidance. There’s a time window here, too, so look for it. Sorry about the discouraging word….Merrill 4/15/09.

The following is a verbatim copy of an article that originally appeared in the wall street journal (in ‘Smart money’).  It’s presented here because it has good advice for 1st time home buyers, but it also, in paragraph 4, advises they should use an “Exclusive buyer agent”, and links to the national association of exclusive buyer agents, (in paragraph 4.) That’s significant because merrill was a founding member of this organization, its first treasurer and its fourth president.  (Also see “About us” for more detail.) 

Deal of the Day by Deal of the Day by Lisa Scherzer (Author Archive) 10 Mistakes First-Time Home Buyers MakeThe declining home values that are plaguing homeowners are just one of the factors creating an opportunity for prospective home buyers. Standard & Poor’s latest Case-Shiller index, which tracks home prices across 20 major U.S. cities, reported that values dropped 19% in January from a year earlier.Those depressed values, combined with near-record-low mortgage rates and government incentives (an $8,000 first-time home buyers’ tax credit included in the stimulus bill), are luring more first-time home buyers into the market. Indeed, a recent Century 21 Real Estate survey found that more than three-quarters (78%) of potential first-time home buyers say now is a good time to buy.If you agree, be aware that buying a home comes with plenty of potential missteps. Here are 10 all-too-common mistakes first-timers make.

1. Not knowing how much house you can afford.Many novice home buyers spend a lot of time researching homes – comparing kitchen layouts and backyard square footage – but very little time researching their financing options. One of the first things buyers should do is talk to a qualified lender and get pre-approved for a mortgage, says Claire Clark, senior vice president of business development at Prudential California Realty. Without first figuring out how much house you can afford, you risk falling in love with one you can’t.

2. Assuming foreclosures are great deals. Just because the previous owner owed $450,000 on a house before the bank took it over doesn’t mean it’s worth that much now. Values have slipped significantly, says Jay Michael, partner at Estate Property Group, a

Chicago real estate brokerage, so you may not be getting the bargain you think with a foreclosure. Also, most homes owned by lenders or banks have been sitting vacant for months and may have been vandalized. That could require extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll likely reap by buying a lower-priced foreclosed home.

3. Letting your true feelings show. No matter how much you’ve fallen in love with a house, don’t let the seller’s agent in on it. Otherwise, they will gain the upper hand in negotiations.

4. Failing to find a good buyer’s agent. Landing a mortgage is tough these days. So buyers should rely heavily on knowledgeable agents to help them get their finances in order, says Michael. After all, buyer’s agents have a fiduciary responsibility to the buyer exclusively — and should be looking out for their best interests. Start your search at the National Association of Exclusive Buyer Agents, a nonprofit representing buyers (exclusively.) Or consider using an agent recommended by a relative or friend. Interview each candidate about their experience, if they’ve worked with first-time buyers before and what kind of service you’ll get from them.

5. Underestimating the costs of owning a home. Whether it’s a rusty pipe or a leaky roof, things go wrong and need to be fixed. Many home buyers don’t anticipate the additional costs for repair and maintenance, or for an increase in utility costs, says Erin Baehr, CFP and president of Baehr Family Financial. Consider the age of your new home and how well it’s been treated by the previous owners in your budget. Be prepared to set aside a small percentage (1% at most) of the home’s purchase price annually for repairs and upkeep.

6. Failing to budget for property taxes.Property taxes – and the likelihood that they’ll climb over the course of your time in the house – should be factored into any home-buying budget, says Baehr. To get an idea of how much you’ll be paying, call the local assessor’s office or talk to people in the neighborhood.

7. Assuming your first offer will get accepted.As home prices get even more affordable, competition is bound to heat up. “You can’t assume you’ll walk in there, make the offer and get it,” says

Clark. Try not to get discouraged if you lose out on the first – or second – house you make an offer on.

8. Skipping the inspection.Before signing anything, hire a professional inspector, says Justin Lopatin, a mortgage planner with American Street Mortgage Company. The seller isn’t likely to tell you there’s mold in the basement or the walls are poorly insulated. Lopatin advises buyers to find and hire their own inspector – independently of the realtor – to ensure there’s no conflict of interest. (You can find inspection companies in the phone book, or by doing a simple web search with your zip code.)

9. Doing too much too fast. Some buyers want to make the house their own right away, says Baehr. They overextend themselves on credit to do so, and assume the improvement will pay for itself by increasing the home’s value. But that’s not always the case – especially in today’s market. Instead, buyers need to exhibit patience and make changes over time.

10. Failing to include a contingency clause in the contract.A mortgage financing contingency clause protects you if, say, you lose your job and the loan falls through or the appraisal price comes in under the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property. Without the clause, he can lose that money and still be obligated to buy the house, says Lopatin.(Corrected April 6, 2009: As originally published, we stated that a contingency clause protects home buyers if the appraisal comes in above the purchase price. In fact, protections kick in when the appraisal value is under the purchase price.)