Vinnie Alonzo Birmingham Homes

Using a Buyer’s Agent to Purchase Your Birmingham Home…

Vinnie Alonzo — Tue, 31 Jan 2012 12:49:00 GMT

This one really confuses the public. In this business I’ve worked with all kinds of buyers, from surgeons to hourly laborers, they can perform open heart surgery or lay a new patio in your yard but they don’t have a clue as to how to be properly represented when purchasing a home.

I recently met a buyer at one of my open houses who was relocating to Birmingham. I asked him if he was working with a local agent and his response to me was, “No, we do a lot of our own research, then we drive around, attend open houses or call the number on the sign. When we find one we like we will probably work with that agent. I can save commission that way, so why do I need a buyer’s agent?” I explained to him some of the advantages of working with a buyer’s agent in their search for Birmingham homes but then he said to me “With my company, I’ve moved around a lot, you know this isn’t my first rodeo.” With his last comment I was about to cut him loose, let him ride off into the sunset but then I thought let me try this one more time. What I said to him was this. “You do you have a computer, right?” His answer was yes.” Do you look at a lot of homes on the net?” Sure was his reply. “Do you have adequate antivirus protection, like Norton or McAfee? “Dude, of course I do. I would never go on line without having adequate virus protection.” Well, look at hiring a buyer’s agent as your antivirus protection of real estate, you should never go out and look at homes without being properly represented, a buyer’s agent will have your back, his fiduciary responsibility will be to you not the seller. That agent you meet at an open house or the one who answers the phone when you call off a sign is working for the seller, his loyalty is to get the best price for his seller, and not you! I shook his hand, gave him my card and wished him well. I think he got it, but only time will tell.

Typically at my initial consult I explain to my prospective client the various representations and in the outset I will be representing them as a single agent. This is the most common form of representation and seems to be the most desirable in the buyer’s eyes. I mean why not have someone work exclusively for you? Agents who represent clients under single agency owe a fiduciary responsibility to the client. Those agents cannot share confidential information with the other party or the other party's agent. Single agency agents must use care and due diligence to perform duties, disclose all material facts and be honest.

Once this single agency relationship is established, the real work begins. The home buyers puts all their trust in me, it is my job to find them their dream home. I have to prove to them that there is a real value to working with a buyer’s agent. From that first meeting I suggest that they get with a local lender and get prequalified so they know how much to go “shopping for”. No sense looking at $200,000 homes if you only qualify to buy one for $150,000. The buyers have discussed with me their ideal location, number of bedrooms and baths, possibly school systems, and price. From here I prepare for the buyers a list of homes that fit their criteria, fill up my gas tank and hit the road.

There are many misconceptions regarding representation and here in Alabama the scenario becomes even more complicated because not only do we offer single agency and transaction agency, but we allow consensual dual agency. Consensual dual agency is when the agent can represent both sides of a transaction. It sounds complicated but it’s not and in some cases people feel it is a conflict of interest. If a Realtor uses common sense and are fair to both parties dual agency can work well, and I have closed many transactions representing both parties. I prefer this type of dual agency representation for several reasons. Having control of both the buyer and seller and knowing all the “pieces of the puzzle," as I call it helps me get to the closing table without any bumps in the road.

Oh yea, remember the buyer I met at my open house? The cowboy who told me this “wasn’t his first rodeo?” Well, he called. I was a bit skeptical at first but after sitting down with him I realized he was a contender and not a pretender, so I took him on as a client, gassed up the car and hit the road (or should I say trail)…..

Chasing the Market…..Don’t do it!

Vinnie Alonzo — Tue, 31 Jan 2012 12:37:00 GMT

In this type of market we often find sellers who have unrealistic expectations. I mean why not? They have put in a new kitchen, painted it from top to bottom, and in some cases have finished off that “man cave” in the basement. They’re expecting to get this back and in the past that was the case. Unfortunately, we are in a very unique market, and if not educated by an experienced realtor, you can find yourself “Chasing the Market”.

Recently I met with a FSBO in my community and sitting there at his kitchen table I said, “Lou, where did you come up with your price?” His answer to me was, and it didn’t surprise me at all, “well I thought I would try it there for a while and we can always drop it down if I don’t get any offers. I want to build in some negotiating room.” This might have worked in the past but all a seller is doing is driving buyers away rather than attracting them. This is a typical case in Chasing the Market and several things can happen. First, the buyers who are out there now are educated. There is so much information available on the net that they know what homes are selling for in that neighborhood and in their mind have established fair market value. You lose all credibility with buyers and send a message that you are not serious about selling. Secondly, when a home sits on the market for an extended period of time you could be sending two different messages to the buyer. Some might feel that you are not negotiable and others could interpret it that you are desperate and come in with a low ball offer. In this type of market I tell my sellers to have thick skin because there are those buyers who are going to present insulting offers. Properties priced to market sell. Over priced properties sit and appear to be stale and don’t sell. Lastly and most importantly, data is clear that the longer a home sits on the market the final selling price is lower than it would have been if it had been priced correctly out of the gate.

Below is a chart that shows a typical seller “Chasing the Market”.

When you price your home over market value you do nothing but send a message to the buyers that you are not serious about selling. Current sales in the area have determined your Market Value. What this charts shows you is a Market Value line, your home Value on the left and Time line at the bottom. When you start out listing your home above the Market Value you are in the beginning stages of Chasing the Market and nothing good happens from here on in. Here’s what happens..Say your home has market value of $250,000. In the past you could list your home for $275,000 or $280,000 leaving room for some “negotiation”. Unfortunately that traditional pricing worked in the past and leaving that room for reduction was a wise pricing strategy but not now. It sits on the market for sixty days with no lookers and then you agree to reduce the price to $265,000. Unfortunately, now with current market trends your home has dropped another $10,000 to $250,000. This goes on again for another sixty days and, you decide to another price reduction but the market has adjusted and your home is worth less. This is Chasing the Market. In the past, if a home was priced too high the market would eventually catch up and the home would sell. In today’s real estate environment if a home is not priced at market or below market value you will become very frustrated at the results and the home will not sell.

Here is my suggestion to you, and I do it all the time. I ask my seller to have an appraisal done before their home is listed. It’s a small investment in the big scheme of things to get to a successful conclusion. Like I tell my sellers, put a set of trained eyes on the home. I can do my best to provide comps and sales in the neighborhood but nothing is as good as a full appraisal. This can really benefit both seller and realtor. An experienced appraiser can also be very helpful to a seller and prior to contract point out things that might need to be done to help his final number. He can make suggestions on minor repairs that might help yield a significant return. Nothing is worse than going to contract and then being faced with the home not appraising after having spent all that time in getting it listed, marketed and so on. Just a suggestion, see how it works…

If you are thinking about investing in a home in Birmingham Alabama, either buying or selling or both, please don’t hesitate to call @ 205-453-5345. Remember it’s not the sign in the yard but the name on the sign. Vinnie Alonzo and RE/Max Advantage South “Two Names You Can Count On”

You have many choices in Real Estate but only one right one!

Advantages of Buying a Home in this Market vs. Renting……

Vinnie Alonzo — Wed, 25 Jan 2012 19:43:00 GMT

With the current real estate market conditions, many of my customers sit on the fence of “to rent” or “to buy”….such a dilemma, but both good questions. In this article I will get into why it is better to buy a Birmingham home rather than rent in this market. If you watch the news or listen to the radio you will hear how hard it is to get a mortgage, how soft the real estate market is, and this is probably not the best time to buy, WRONG! What you have to understand is that much of that news is national and their numbers are based on national statistics. Our market here is more localized and it is the right time to buy versus continuing to rent. I use this analogy often, “paying rent is like leaving cash in your mailbox each day.” It is no secret that real estate sales have softened over the last several years, even here in Birmingham, but nothing like other areas of the country such as Florida, Texas, & California, once again, this is the difference in local versus national markets.

When considering buying a home you may think it wiser to wait until the market adjusts or starts its upward turn but it’s a catch twenty- two, especially if you’re selling and buying. I just had this conversation yesterday with one of my clients. This seller who will be a buyer in this market gets it, and that’s very rare. Most people want it on both ends. We discussed selling his home, where the market is, and what he will get. He sees this as an opportunity to “buy up” with the many opportunities that are out there. He realizes that if he waits until we see things start to turn he might get more for his home but he will wind up paying more for the home he buys.

Owning a home is the largest single investment that most people will make in their lifetime and now is the time to cut that rental umbilical cord and jump into this market as a homeowner. Consider this, “According to the most recent S&P Case Shiller price index, residential real estate home prices have returned to the first quarter of 2003 levels.” That’s huge, add to that these crazy low interest rates, high inventory up and in some cases some very motivated sellers. In 2003, 30 year mortgage rates stood around 5.9%, today they are 3.75%. How does that impact the actual COST of owning home?” I saw a similar chart on a fellow blogger’s post and thought this really drives the point home.

Date	Loan Amount	Interest Rate	Monthly Payment
2003	$250,000	5.90%	$1,479
Today	$250,000	3.75%	$1,158
Difference in mortgage payments			$321

So why rent when these types of savings are available in today’s market? Where else can you invest your money? Real estate still yields the highest return on investments over money market accounts and the stock market. The pessimistic buyer might say so why shouldn’t I wait? Well understand this, even if home prices go down further, with the interest rates at these record lows, the cost of buying a home has decreased significantly. Now this isn’t going to last, once the interest rates go up, so will that American Dream of home ownership, so why wait?

Well I can tell you why. Many of these fence sitters are disregarding homeownership because they see their friends and family end up in short sales or foreclosures. They view renting as low risk and this assures them that they will never wind up in that same financial nightmare that has attacked their friends and family members. The problem with renting is this, a homeowner with a 30 year fixed mortgage paying $1,500 a month would still be writing the same check twenty years later. In 2011 the Consumer Price Index included a .4% increase in monthly rents, the largest increase since 2008, which represents an annualized increase of 4.8%. Think about it, if you paid rent for 30 years you would be paying over $900,000 and the same $1,500 mortgage payment would be only $540,000 with an end in sight. Waiting to get a home at a better price or for the rates to go lower could cost you more when you finally buy a home. So, what are you saving by renting?

You have many choices in Real Estate but only one right one!

2 Story For Sale in Greystone Legacy

Vinnie Alonzo — Mon, 09 Jan 2012 17:46:00 GMT

Huge Seven Bedroom Home!

• 6,090 sq. ft., 5 bath, 7 bdrm 2 story "Custom Built Huge Corner Lot" - MLS® $749,000 - Priced to Sell!

Greystone Legacy, Hoover -
Immaculate 7BR, 5 1/2 BA Executive Home. Main level features 2-story foyer w/double entry doors & wrought iron coach lamps. This home features hardwood floors & crown molding throughout. Lg master suite on main level w/beautiful spa like master BA, his & her closets, granite vanity w/2 sinks, sunken jetted tub & separate shower. Oversized 2nd BR on main level plus 3 BR's upstairs with additional bonus area. Formal DR w/arched openings & old world chandelier plus transoms, 2 story hearth room w/textured walls, stone fireplace! 2 story GR w/vaulted ceiling, columns, arched openings & gas log fireplace. Huge chef like kitchen w/custom cabinets, large island w/breakfast bar, second island, granite countertops, tile backsplash, huge walk-in pantry, stainless steel appliances including gas cook top, range hood, dishwasher, microwave, double ovens. The basement is finished w/den, media room, 2nd Kitchen, exercise room, & 7th BR and BA. Huge 3 car garage with circular drive. Don't miss this!

Vinnie Alonzo Birmingham Homes

Using a Buyer’s Agent to Purchase Your Birmingham Home…

Chasing the Market…..Don’t do it!

Advantages of Buying a Home in this Market vs. Renting……

2 Story For Sale in Greystone Legacy

Do Birmingham Homes Sell During The Holiday Season?

1 1/2 Story For Sale in Highland Lakes

Price Reduced on 3157 Bradford Place in Meadowbrook

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Price Reduced on 1336 Legacy Drive in Greystone Legacy

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CDPE

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