Dear Listing Agent,

You were sent a link to this post, because a Frankly agent has submitted an offer to buy one of your coveted listings. We understand you may have several offers, but we hope you will consider the reputation and technological abilities of our firm, as the agent might be just as important to getting a deal closed on-time and as promised, as the buyer’s ability to buy.

While our offer might not be the highest in price, it is realistic and likely the cleanest offer you have seen. Still undecided? If necessary, know that our use of technology also allows us get you a written and signed response to any written counter in 15-20 minutes, vs the average agent’s 3-6 hour delay. So what do you have to lose to give us a shot?

Here is a video testimonial from the listing side of a recent 5 offer bidding war that we won. We had a super clean offer, we did what we said we would do, we did not renegotiate, and we closed on-time.

Thank you for your consideration,

Frank LLosa Esq.
Principal Broker Frankly Real Estate Inc.

Attorney at Law, only in NJ

Click here to view the embedded video.

My buyers were US military and buying sight unseen from China, they contacted me 100% from my website. They picked me over “another Realtor I was considering, he was really cute, but I like your spunk.” I wondered if I should be offended for basically being called ugly.

Also their last experience years ago with a Realtor was a bad one, a USAA recommended Realtor that they fired mid-deal (those Realtors pay kickbacks to USAA, thus newer agents gravitate to those programs).

They entrusted me to be their eyes and I took buyer agent photos and videos of properties to make them feel as if they were there. They loved this home and it was UNDER their max budget. The only problem was the 4 other offers AND they had a VA loan which is historically much more difficult to win a bidding war (the appraisal system is tougher and there is much less money down vs conventional 20-25% down buyer).

In this case our offer focused on clean terms, not on the highest price. Actually we were $35,000 lower than the highest well qualified buyer. Many factors led to us winning. Perhaps one was the sellers thinking I, the buyer agent, was courteous (see video). Another was how we write our offers to instill confidence and low stress for the seller, and lastly the use of technology. In this case text messaging, I was able to get a last minute text message to the listing agent that literally stopped the signing of another contract in its tracks. They pivoted and gave our client a shot and we accepted.

We proceeded to follow through and not renegotiate, like many wild offers tend to do, and we closed on time and in a stress free manner.

Just like this client, we are never too busy for you, hope you will contact me with the area and price you are looking in.

Click here to view the embedded video.

{Update 11:30pm April 1st 2013. This was an April fools joke. See AgentGenius’ coverage of this prank.}

Announcing the launch Monday April 1st, for LostListings.com!

When Agents Lose, You Win!

A bold new service that goes where no other brokerage firm has gone before! Revolutionizing the industry and furthering transparency! Further showing why Frank won Inman New’s 2009 Innovator of the Year award, video).

Background:

Times are tough! Our firm, Frankly Real Estate Inc, is finding that we are losing more and more listing appointments. Whether it be sellers looking to do it themselves FSBO (see post Save $20k? Selling By Owner) or just picking cheaper, more local or more knowledgeable alternatives. We know we are great, but not everyone else is agreeing with us.

So we had to look forward to a new revenue model. At least to help us cover the loss in gas and time wasted.

The idea came from a recent real estate class. The question was:

What happens if an agent meets with a seller and finds out secret details of that home for sale?And then if that agent is not hired, but they have a buyer that wants to buy that home. Can they share the seller’s secrets? To whom is the fiduciary duty?

Turns out the Fiduciary Duty is 100% to the buyer client (assuming they are a signed client with an Exclusive Buyer Agency Agreement, don’t miss that blog post!)

So that got me thinking. That data on the seller… that is damn valuable.

An agent that loses a listing might have this data, and could sell it at auction on LostListings.com, such as:

• When a new listing is hitting in a hot neighborhood. Value= $300-$5,000
• Information about a patched up leaky roof. Value= $200-$2,000
• Almost broken furnace. Value=$5,000
• Information about a rodent, radon, oil leak problem. Value=$500-$25,000
• Foundation crack being covered up or hidden. Value= $30,000
• The Seller’s desire to sell quickly to avoid foreclosure and willingness to take $25,000 under market value! Value= $25,000

What would you pay for information on a hidden $30,000 defect?

Now on LostListings.com, unsuccessful listing agents can sell their acquired information at auction to either buyers directly, or to buyer’s agents.

This is currently only in the DC area, and soon we plan on launching a Kickstarter campaign to raise $350,000 to launch this idea nationwide. Will you join us?

I hope you will watch the video and check out LostListings.com . If you find it as revolutionary as I do, please leave a comment below on whether you think this is brilliant, won’t work, might be unethical, will work, etc. Let’s start a conversation. For comments go to: Blog.FranklyRealty.com, to also see what others have to say! And make sure to subscribe to this blog (upper right corner).

Oh and share this with friends! Tweet it, Facebook Like it, snail mail it to your relatives if you need to!

Update 11:05AM: While I am all for negative comments, please make sure you at least make a quick visit LostListings.com before completely passing judgment.

Written by: Frank LLosa Esq.

Broker FranklyRealty.com

Owner FranklyMLS.com

Owner LostListings.com

More and more I am seeing the technique of purposefully underpricing a listing in order to create an artificial bidding war. It is a very tempting pitch from your listing agent, but don’t fall for it! They may want you to underprice in order to sell your home quickly and to move on. Their goal might not be to net you the highest amount. And it doesn’t work, in my opinion.

Example (ass described in the video)

Listing 1, our listing. $429,000, sold for  $432,600 or 101% of list.

Listing 2, not ours. $399,000, sold for $433,000 or 108% of list

One might initially think listing 2 did better. However, #2 was listed a month after #1 went Under Contract fast (so they should know that it went near full price, and newer listings in an up market tend to ask for about $2,500  more). Listing #2 was nearly identical, but two floors higher plus a fireplace. Two floors is about $6,000 in value, a fireplace, maybe $2k. Yet they only got $400 more on a place worth $8,000 more. The result of underpricing to create a bidding war… a loss of $7,600-$10,000 in value. Oops!

Why doesn’t it work? Bidding War Exhaustion ™,is what I call it (see Video at minute 4) . Buyers have a mental block for going over a certain % above list. Even though I frequently tell buyers to ignore the list price. Why take guidance from the listing agent who might not have a clue about the area.

BUYER TIP:
IGNORE LIST PRICE! (sometimes)
I would rather you bid up a place $10k over list on $20k underpriced home then bid down $50k on a home that is overpriced by $80k. And for those of you that say “Oh no way man, I’m not getting involved in a bidding war” you REALLY need to talk to me. If you don’t want to buy this year because you think it is a bubble 2.0, that is fine, I wont argue (don’t miss the blog post “Lose $40,000″ the moment you buy a $500k home).

But if you are going to buy in the near future, that approach may cost you money. What, you are going to do? Wait until the NEXT house hits for $10k OVER the post bidding war price of the one you lost? Well that one will get bid up too, and you might be $25k worse off.

More buyer DC area bidding war tips here including one crucial tip only supplied if you email me directly, or via a comment.

SELLER TIPS:

Did you know the moment you buy a home, you lose 8% equity! For those of you that put down 10%, that is an 80% loss in your investment overnight, or with a stroke of a pen (actually hundreds of strokes, those damn stacks of closing paper).

Everyone has heard about the “Drive a new car off the lot” effect. Well this is the same. (on the flip side, most car values keep going downhill.)

I’m not trying to scare you, but just put into perspective how real and huge an investment this is. You better get it right, and have the right representation (subtle plug?? Contact us 3-6 months before you think you are ready! This ain’t a checkout in Target.). Did your mom’s friend’s agent warn you about this? Or that “great deal” agent? Probably not.

One of my first qualifying questions is “HOW LONG DO YOU PLAN ON LIVING IN YOUR HOME?”

Note I didn’t say “own” the home. But living in it yourself. I say this because many say “I can see living in it for 3 years and renting it for 3 or 4 more.” The problem with the rental equation is usually rent won’t cover most mortgages, so you actually lose $5,000 on a $500,000 home. I see it all the time. Owners bleeding money renting their place out. So after 3 years you lose $15,000! Well that defeats the purpose of holding to weather the ups and downs of the market, and scrambling back to break even.

I recommend a 7 year minimum hold! And I don’t believe in timing the market. Buy when it is right for your needs.

When you buy a $500,000, you immediately lose about $40,000! Meaning if you needed to sell it a week later you would net $440,000 after those pesky Realtor fees and 2-3% in closing costs and taxes. OUCH!

So your best bet is a long hold to get out of that ditch. Heck, let’s talk about getting back to break even, let alone making a buck.

The days of the starter home are dead. As declared in my 2009 blog post Death of the Starter home still holds true. (My older blog posts are sometimes better, unlike cars, my posts keep their value).

Not willing to hold it for 7 years?  Maybe only 5, ok, no problem, just make sure you fully absorb the massive risk of homeownership. We have had clients sell in 2 or 3 years and broken even. They are lucky. The market skyrocketed during that time. I know far too many more people that got stuck. Stuck in a place they weren’t planning on holding for too long. They wish they rented.

(sidenote: Ok, so for all of the people that I just talked out of buying, you might be wondering how we can have a business this way. What way? Through honesty? We have people come back to us years later, when they are ready. Or I ask a favor, if we can’t win your business, just make a point to send us your friends and family. And sending them to use the wicked awesome FranklyMLS isn’t the same as telling them to use Frankly Real Estate Inc. and to read this blog post. Ok, guilt trip over.)

To D.V. that wrote on 2-25-2013 “I got encouraged to contact you after watching your ‘I am not too busy for your clients’ video :-)”, I replied in 16 minutes, sorry for the delay! Let’s get you a place in Vienna!

Love to get your comments! Both good and bad.

Written by: Frank LLosa Esq.*

Realtor/Broker FranklyRealty.com Maryland, DC, VA

Owner FranklyMLS.com

*Attorney at Law, only in NJ

Report typos please.

Now for Listing Advice. I previously spoke about Bidding Wars for Homes for Sale in Maryland, DC and VA in my post Bidding Wars. Secret to Winning A Home in the DC Area (of which about 20 people emailed me directly for my #1 secret tip).

But this video is from the perspective of the SELLER who might find themselves selling in this Hot Market.

The first instinct is to think one’s house is “easy” to sell. It actually becomes kinda a joke because we hear it so frequently. Everyone thinks their home will be an easy one. Yet it never is.

Click here to view the embedded video.

(Video)

3 FranklyMLS tips and a major update that things are changing and how one user thought we were too busy for them!!

First, Just The Tips!

Tip 1) Add a Favorite

When you click on the in either the spreadsheet mode of the single page featuring a property, you will get hyper updated alerts on changes to this home. Including any price drop, remarks change, more photos, added 3rd party comment, agent sneezing,  under contract or even the final SOLD price. An awesome tool that so few utilize.The default is daily email change alerts, but in this market you might want to opt for the alerts as fast as 15 minutes after the change is made (ask us how).

Tip 2) Save a Search!

Again, seems obvious (at least to me) but 80% of the users don’t have a saved search set up properly. Assuming you are logged in, after you conduct a search, press the Save Current Search button in the middle of the screen. This will send you all new listings, price drops and sold prices for everything in your search area and criteria. NO need to obsess and check the site several times a day. Sit back and relax. Also the emails are VERY cell phone friendly with a direct link to the mobile version of the listing.

Tip 3) Use the FranklyCRA Comparative Realtor Analysis system

If you don’t know what this is, you are missing out in a major way. Unlike ANY other site, we let you quickly see all the MLS listed homes that each agent has reported in the system (and which side they were on). You can see their track record. Are they an overpricer? Do they frequently create bidding wars, and if so what is the highest they have gone before? All data that will help you with that bidding war (see post on winning bidding wars). While useful for users to see directly, experienced Frankly agents know how to extract meaning from this data. In ways you wouldn’t imagine. (photo of Michael Johnson breaking the “track record” in the 1996 Olympics, taken by yours truly)

Part 2 of blog post:

Now for the fun part (see fun animation above).

The Open Letter about changes to FranklyMLS.

The final straw was an email today from a user named Kriss that said “Are you guys really available to new clients?” (I was floored! Of course, the answer is yes, how did she not know that?!)

We don’t want anybody to think that anymore, so here are the changes to FranklyMLS and how we plan to interact with the users (opt-out below, click & done).

1) Many users don’t realize that FranklyMLS is run by a real estate firm, Frankly Real Estate Inc. They will now. We will be making this clear by reaching out to potential customers more frequently (feel free to unsubscribe below to this blog and the MLS site in one click). Including more integration of FranklyMLS, our firm, our agents and the “insider scoop” blog. If you aren’t reading this blog, you may be losing tens of thousands of dollars.

2) For 5 years this site was open to agents from other firms and their clients. Now to keep costs down, I ask that those agents rely on their own broker’s home search solution (or join our firm, if you make the cut).

If you are a FranklyMLS user, and you love your non-Frankly agent and have absolutely no intention of using our firm today, or in 5 years, I ask that you switch over to their cookie cutter search site. (or make a small tax deductible donation to this nonprofit). And if you don’t love your agent, give me a call at 703-827-4006 or email (faster).

3) I no longer think that being a stealth, hands off site/firm is what many people need or want. Also it doesn’t put food on the table (don’t worry, we still do alright) . For one, 80% don’t sign up for email alerts correctly. We now plan to fix that and use personalized (humans, Realtors) service to do that.

More Follow up and integration with the blog, which, once you read it, you will see how a good Realtor can offer real value beyond simply filling out paperwork. The “You don’t know what you don’t know” (see post)

Did your agent agree to your “hurry up” and get the listing up and thus result in a “Throw Up Listing” that takes longer to sell?  (we recently refused/lost a listing because we refused to put up garbage that would hurt the client)

Or did they win you by telling you your house will be on 600 websites! (as if that isn’t the default nowadays, but sounds great!!)

Or you just never hit this blog to get non-boilerplate Listing Advice.

Or maybe it is partly your fault for the home being overpriced? You demanded a price that in your gut felt right? Or they gave you no guidance and said yes to every command. (President’s shouldn’t  have “yes men” around them,  and you shouldn’t hire a “yes man” agent, hum that sounds like a solo blog post, make sure you subscribe today!)

Perhaps, but has the agent done their part and shown you EACH home that has gone under contract or sold nearby since the day you listed? And have they contacted EACH buyers agent and asked them “I see you bought, xyz, would you mind telling me why you passed on our house?”

My guess, very unlikely. Why? Because that stuff takes time.

Click here to view the embedded video.

So you want to fire them once the listing agreement expires.

Expect a flurry of new activity before the expiration. Is it a sudden swarm of buyers? Or is the listing agent actually working to bring you a deal (like does your agent contact EACH buyers agent that has visited the home to get feedback). They will dangle the “I have a nibble here, just give me another month.”

Whatever you do… if you have decided to switch real estate agents in a week, DO NOT LOWER THE PRICE!!

It is hard enough for a new listing agent to try and create new excitement. It is 10x harder if you give the initial listing agent the $10k price drop before expiration. What, is the new agent going to take it on at the same $10k lower price?

Also hopefully your agent won’t throw you under the bus (house) and tell buyers you are desperate, in hopes of getting a low ball or something to show for themselves.

Add in the comments any pre-firing tricks you have experienced or heard about.

Best of luck! Reach out if you need help. I reply quickly and no I’m not too busy for you.

Frank B. LLosa Esq

Broker FranklyRealty.com MD, DC, VA

Attorney only in NJ

ps. Please report typos

A “Back-Up Offer” is an offer that is submitted when a home is already Under Contract (as seen on FranklyMLS with the strikeout line) with another buyer. (sidenote: this post kinda conflicts with my “this home is not available” post on the FranklyMLS blog, feel free to call me out on it).

If the seller signs it, it becomes the “Back-Up Contract.”

Does it happen often?

Sure. My guess is 10-20% of deals. Especially in the first week of being UC. I once had a listing with 4 contracts that fell out!

How does one put in a back up offer?

The second potential buyer will submit, preferably with their buyer’s agent (which should be an exclusive agent), a regular 20+ official contract with an addendum that outlines the details of the “back up offer.” This offer becomes ratified when it is signed by both parties. Then, in the event that the first contract does not perform, then the back-up offer immediately becomes the “primary contract”.

Why do 10-20% of contracts fallthrough?

1) The appraisal! If the property does not appraise for the contract price, then both sides have another round of negotiations. Some buyers (silly) freak out with low appraisals and demand a 100% adjustment, ie price drop. Some sellers say “you wanted to pay X, we aren’t dropping because somebody disagrees with our free-market agreement.” The deal is then dead.

2) The Home Inspection. Either too much was wrong with the house, or the buyer wanted too much in repairs or concessions. The seller told them no, and the buyer walks.

3) Finance Contingencies. The lenders says “Oops, I thought you could qualify, but that new car you bought blew up the numbers.”

4) CONDO/HOA Doc. This is a big one. Buyer’s remorse or the buyer finds out the place doesn’t allow 2 dogs, etc etc. The buyer can walk, or void the contract, after 3 days (different for new construction) for no stated reason.

5) Add more in the comments, I bet we can find 20 reasons

Noteworthy buyer concepts (simplified of course):

1) The SHORT SALE Quasi-KICKOUT!

I might have to remove this because it is just too good. A back up offer on a Short Sale can be perfect surprise. Why? Because the home goes under contract when the seller signs. But nothing really matters until the BANK signs! So if you offer before the bank approves it, and if the listing agent submits it (sometimes they won’t, and for good reasons) to the bank, the bank might just say no to the main offer and take your “back-up.”  You can also do this after the first buyer has waited 3 months for approval. Swoop in at the last second and snag it. Unethical? Heck no, this is business.

If that doesn’t give you a “Geez, maybe just maybe, no matter how smart I am, or what I got on my SATs, maybe somebody in the field of real estate, with experience, might be able to add some value to my home search.”

2)  A bonus incentive for the seller. A back up contract/offer can be higher than the current contract.  If the buyer really wants a place, they can offer $5k or much more than the primary offer (there are ways to try and find out what that offer is). Why would they do this? Why not just make it the same amount? Well if you offer $30,000 more (or better terms), and the first buyer is playing games and asking for concessions, the back up offer suddenly appears much more appealing. If the offer is the same amount, the seller might just figure “well we would have this problem with the next buyer anyhow and we would lose another 2 weeks, so lets just proceed”

3) The back up can be lower or the same price. In this instance you would be relying only on the buyer changing their mind and less on the seller having an incentive to switch to yours.

4) Most buyer agents don’t like doing them because they think it is a waste of time. However one of our agents bought their dream home as a back up offer. So do what the agents do! I just submitted a back up yesterday.

SELLERS LISTEN UP TOO!

Don’t think this is just for buyers.

Is your listing agent soliciting back up offers? No? (see Sucky Listing Agents ‘07 post) They should be!

I would say 90% of Listing Agents do not bother. Easier to sit back and wait for a problem, even if that results in your client taking a $10k hit. (there is no monetary motivation to work twice as hard to make a couple hundred bucks more in commission).

If you decide to interview listing agents (some people recommend this, I don’t, I think you should just hire us, too much BS out there that you might believe), ask how many back up offers they got on their last 10 listings, or if they asked for them. Or look at their remarks on Under Contract homes. Do they ask for back up offers? Most of our listings have that (there are some reasons not to). Again, goes with the motto Excellence Comes Standard TM (I was gonna call is the “Duh, Of Course We Do That” service, but it was taken).

In conclusion, a back up offer is perfect for that really picky buyer that just MUST have that one particular house they just had to have.

Written by Frank B. LLosa Esq*

Broker FranklyRealty.com

Stop thinking I am too busy for you! Try me, I’ll reply in minutes.

p.s. Blatant ad coming up… But there can also be draw backs for back up buyers that can make you worse off than just waiting for the primary to fall out. But I’ll have to keep that for current clients and hide that from the competition. I can’t tell everyone everything. Also there are not enough people visiting this site to put food on the table selling banner ads, so I guess a select few of you that see value in this can contact me to help you buy a home, and you get all of this info and the secret stuff.

*NJ only

Photo credit: Truck image, Lens image, cash

Click here to view the embedded video.

Disclaimer: Do not believe the post title, it is a hyper exaggeration. Your results may come in under $1,000,000 in savings.

But why save Trillions, when you can save Billions?

Ok maybe a bit much, but quote is the cliff notes: “FranklyRealty.com got me more money than I ever would have imagined.” Why exaggerate when you got that?

With all those compelling options buyers and sellers have today, I think I need to go into more detail explaining exactly how a great agent can help you NET more and more importantly win a home when inventory is tight.

This client is the perfect candidate to explain exactly what we do. A year ago his approach to real estate was typical “I’m smart” (oftentimes a lawyer or professional) and “I will go For Sale By Owner, FSBO, to save money selling and I’ll be really smart and I will use a rebater to save on buying.”

Click here to view the embedded video.

But then he got educated. Read almost every blog post in this Blog and became a convert (ie. even smarter than smart). He took the leap and used Frankly Real Estate and is here to share his experience with others considering FSBO, Rebating or your mom’s friendly Realtor (which is an upcoming post, so make sure to subscribe!). Don’t get me wrong, I am not knocking going solo via FSBO (see best post ever on “saving” $20,000 via FSBO) or Rebaters.

Heck, my long standing moto has been “I used to rebate, but then I got good”.

* Licensed Attorney in NJ

Frank