Tuesday, February 19, 2013

Grants, loans and rebates for Sandy losses

I attended at seminar this morning with my wife, Debbie,  which was held in the Mancini Room of the Ocean County Public Library in Toms River.   It was hosted by the Ocean County Board of Realtors and sponsored by the NJ Board of Public Utilities and New Jersey Natural Gas.

There are residential and commercial programs available but most have deadlines of June 30, 2013 which  MAY be extended beyond if the new budgets allow.  Without delay, go to NJCleanEnergy.com/Sandy and.NJNG.com for further details.

Sunday, February 17, 2013


Reposted with permission of James Dingman.

What Percentage Do Real Estate Agents Charge



By James Dingman on February 16, 2013

I check my stats and other metrics for The Set Fee Blog fairly regularly. It helps me to know what’s drawing visitors and what’s not. It’s also helpful to see what search strings people are using to find me on the web.
Today, I had the following as a search string:


“What Percentage Do Real Estate Agents Charge?”

Ok, so it’s not that unusual. In fact, I’ve seen it in the results for this blog before. But today it just jarred me:


What a sad, stupid and unfortunate question!

Seventy plus years of REALTOR double-talk has trained the public to expect to pay a percentage of the sale price of their house to an agent when it sells . . . and that makes no sense whatsoever.
What does a percentage of you home’s value have to do with getting it sold? Nothing!
Think about it:
Here you are in your $350,000 house. Thankfully, you are not upside down. You have roughly $60,000 in equity. So you decide to sell, and list with ABC Realty**, who charges you (and every seller with whom they work) 6%*. When your house sells (for full price), that’s a commission of $21,000!
I’ll give you a moment to catch your breath . . . before I point out that that may be 6% of the sales price, but it’s 35% of your equity!
Meanwhile, your neighbor down the street also wants to sell, but his home is smaller. It’s only worth $250,000. He also lists with ABC and agrees to pay their 6% Commission. When the house sells for full price, the homeowner is going to pay $15,000 — still high, but not nearly as high as your $21,000 commission.
Now, here’s the question of the day: What did YOU get for the extra $6,000 you paid to sell your house through ABC?
More Advertising?
More Open Houses?
A better Sign?
Oh, maybe your agent worked $6,000 harder! Yeah, right.
What you got for the extra $6,000 you paid is this:

Absolutely Nothing

In almost every case it takes no more time, effort, energy, money or marketing to sell a properly priced $350,000 house than it does a properly priced $250,000 house. There are some situations in some areas where a market niche, say, luxury homes, might take a little more time and might require additional or specialized marketing. But these situations are rare . . . and $6,000 extra dollars to sell your $350,000 house? That’s absurd.
It makes no sense today, made no sense yesterday, and will never make any sense at all.
Come on: you don’t pay your dentist a percentage of your net worth when you have a tooth filled, do you? Of course not! There’s no relationship between the two things! Just as there is no relationship between the percentage based commission you are paying your real estate firm and the effort it will take to market your home and process the sale.
Smart Brokers – by the way, ‘Smart’ is a synonym for ‘Help-U-Sell’- Smart Brokers charge a set fee. Everyone pretty much pays the same thing no matter what the sale price is. It’s logical. The Broker works very hard to determine his or her hard costs of carrying a listing, then adds a reasonable profit to it, and . . . that’s it: the Set Fee the office charges everyone.
Here’s a little bit of scripting I actually heard in a REALTOR seminar some years ago. It’s what an agent is supposed to say when a potential seller is shocked by the high percentage based commission.

“I know it seems like a lot, Mr. & Mrs. Seller, but think about it for a moment. We’re getting 6%, yes, that’s true; but YOU’RE getting 94%! I think you’ll agree our commission is actually a bargain!”

I hope next time you need to sell, you’ll do the right thing and call a Help-U-Sell set fee broker. You’ll save a bundle (the set fee is usually thousands of dollars less than whatever percentage based commission you’re being quoted). And you’ll have the satisfaction of knowing that, finally, for the first time in your real estate life, you haven’t been taken to the cleaners!
*Commissions, whether set fee or percentage based, are always negotiable. They are not set by law or REALTOR rule. They are set individually by office Brokers. Price fixing occurs when different Brokers get together and agree to charge the same thing. That’s highly illegal. Different Help-U-Sell offices charge different Set Fees, because the carrying costs of marketing a listing vary from market to market, as do the number of days it takes a properly priced listing to sell.
**The “ÄBC Realty” referred to in this blog is fictitious and is used only for illustrative purposes. Any resemblance between it and any other “ABC Realty”, is purely coincidental.

Thursday, February 14, 2013

Don't let mold get you twice.

I was at a function at the Ocean County Board of Realtors yesterday and an interesting statement was made by an insurance agent and pretty much confirmed by a mortgage rep.

Lots of homeowners who suffered damage from Storm Sandy quickly replaced their sheet rock and insulation but did NOT do a mold test and get a certification when the work was done.  Here's the warning -- years into the future when the owners go to sell, the insurance carrier and new mortgage company MAY REQUIRE that a mold certification be part of the loan and insurance package.  If the certification was not completed at the time of the repair, the walls MAY have to be re-opened for certification.

Here's a classic case of "Better Safe than Sorry" -- do it now!

Wednesday, February 13, 2013

Storm Sandy damage will take years to recover from.

In the past two weeks my wife Debbie and I drove through Long Beach Island and Holgate then from Seaside Heights up to Mantoloking and Bay Head to view the damage.  Frankly, I was knocked on my butt.  We waited a few months to stay out of the way of the cleanup and utility crews but 110 days after the storm shows the extend of the damage and the incredible amount of time and money it will take to try to fix.  Notice I didn't say recover because perhaps some people never will.

Dozens of ocean front homes were broken in half and many more essentially destroyed although still standing.  Some of the small bungalows in Ortley Beach and Lavalette were knocked off their foundations and others just washed away.  The fight with insurance companies is just starting and will go on for months if not a year and when the dust settles, the uninsured losses will be staggering.

Good Luck Point in Bayville is as bad as the Barnegat Beach Island ocean fronts even though it is bayfront.

The days of fairly inexpensive flood insurance are gone and many people will have to raise their houses several feet.  Sadly, if they can't afford to and don't qualify for any grants they will be forced to sell....at a discount.

It will be interesting to look back 5 years from now.

Sunday, February 10, 2013

The Mayor is on the line.



Can you imagine sitting home one evening nice and comfortable watching TV when the phone rings.

"Hello, this is the Mayor calling.  I just wanted to let you know that we'll be hiring about triple the people needed to run the town from now on.  They won't be very productive and your taxes will more than double.  But these are really nice people and they're friends of mine...so be a sport and go along with it, OK."

Would you say Yes?

Probably not.  But what I just presented was a snapshot of the real estate business.  There are more than a million real estate agents in the United States but a need for only about 300,000.  The rest are unproductive hangers on that brokers hire to bring in a few deals a year at most (and the productive agents wind up losing business.) The worst thing is that it is supported by a bloated commission system based on percentages - where sellers pay more and more for basically the same services as the value of their house goes up.  NUTS!

Would you tell the Mayor to raise your taxes to pay for unnecessary workers - I doubt it.  But when your agent asks you to pay percentage commissions that's exactly what they are doing.  Don't be fooled.  Be a wise consumer.  STOP PAYING PERCENTAGE BASED COMMISSIONS!!