I’d say three weeks in a row makes a trend.  After climbing steadily since February, the total active inventory has dropped for three weeks in a row.  I would expect the total inventory to drop by fall, but this is a bit early.

Closing were very weak but I think that will be made up next week since many people try to schedule their closings for the end of the month.  We had some very healthy pending statistics in June and those should be closing about now.

Pendings are doing OK as well.  We had three of our own listings pend last week and represented the buyers in pending two other listings so it was a busy week for us. These are the three that pended, (1,2,3), in case anyone is curious.

To the right is a chart from the AlaskaMLS system.  (Click on it to enlarge)

Ignore the inventory bars on the chart because they don’t make a lot of sense being based only on the last 30 day sales compared to the overall inventory. 

But pay attention to the blue line.  This is the total residential sales in the Mat-Su Borough since July of 2005.  Notice that the total sales line is still holding fairly steady with normal seasonal fluctuations. It’s hard to say that we have a housing crash by looking at that line.  I have seen people write and heard  people say that the housing market in the valley is crashing like it did in the late 1980s.  We can’t really have a housing crash while sales remain steady.

Notice also the bright green line on top.  The total active listings in 2005 were much lower than they are now.  What that line doesn’t show is that new construction was a large part of those active listings.  During that time a seller could expect very fast action on their home if it was priced even close to the realistic sales price. 

That is no longer true, the total inventory of homes on the market is much higher and new construction is not as significant a factor.  So although our total sales remain steady, for each individual seller the market feels slower since they are competing with so many other finished homes. 

If you would like some help determining how to market your home, I now offer consulting services that do not require you to list your home to receive help from an experienced Realtor.  Give me a call if you would like to talk.  My cell is 907 232–7900, or you can always just drop me an email.

“This representation is based in whole or in part on data supplied by, and to, the subscribers of Alaska Multiple Listing Service, Inc. (AK MLS, Inc.). AK MLS, Inc. does not guarantee nor is it in any way responsible for its accuracy. Data maintained by AK MLS, Inc. is for its own use and may not reflect all real estate activity in the market. “

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I mentioned in a previous post about how loan professionals are paid that I would write about how Realtors are paid. 

Of course, the seller who lists his house with a Realtor knows how it is done because he or she signs the contract to pay a certain amount to the Realtor.  The listing contract specifies that when the house is sold, the real estate broker will be paid a certain percentage of the sale. 

The agreement is between the seller and the listing real estate broker.  The buyer is not a part of this agreement at all.   It is generally left to the listing licensee to decide how much to pay a cooperating real estate broker for finding a buyer.  This amount is then posted on the listings that is seen by the Realtor. 

When the buyer’s Realtor looks at the listing they can tell exactly the percentage they will receive if they sell a house.  They may be paid 2% on the sale of one house and 3% on the sale of an identical house down the street.  Some people feel that a licensee will show the house with the higher commission and ignore the other. In my opinion that may be true but it is not common.  Most buyers representatives look out for the benefit of their buyer regardless of the commission amount. 

It is expected among many Realtors that the listing broker will share the total commission equally with the buyer’s licensee.  They feel that they should get an equal share of the commission because the transaction would not happen without a willing buyer.  However, it is not necessarily the case that the commission is shared equally. 

While an equal share of the commission may be an expectation, that is not necessarily what is done.  Nor is true that the commission should be shared equally.

Some local listing licensees will give the buyer’s realtor less than 1/2 the commission, and some will give more than 1/2 the commission to help attract a buyer.  It would be in the interest of the seller to know how the commission is being shared.  If the seller knows and is in agreement with the method that their licensee is using than everything is cool. 

Buyers should also know how, and how much, their representative is being offered to sell a particular house.  In todays slower market we are seeing more and more ‘BONUSES”,  offered to buyer’s representatives if a particular house is sold.  I wonder what a buyer would think if their Realtor showed them a house in which he was being paid 3 1/2% commission but did not show them a similar house that only had a 2 1/2 percent commission.  

Let’s have a little transparency here…it will help all of us in the long run.

If you want to work with a Realtor who gives you many options on how to pay, and how much to pay…check out my consulting articles. And if you want specific numbers where I have a sliding scale from $150 all the way to a 7% commission, give me a call.  My cell is 907 232–7900

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Not sure if we are seeing something here but the inventory has dropped for the second week in a row.  It hasn’t dropped by much, but any drop is news. 

In addition, the pendings, and closed sales are up.  I would say that we may be seeing a trend.  But we need a few more weeks to be sure.

Notice that the average price for this week in closed sales is below $200K.  That is because 23 of the 32 houses that closed this week were less than $200,000.  Compare that with the fact that about 75% of the homes on the market are over $200,000 and you can see why the higher price homes take longer to sell.  You have 75% of the sellers competing for 33% of the buyers.   Boy…that is a rotten paragraph…you need to be a bean counter to even understand it.

We have personally been VERY busy.  Many of our listings have pended in the last couple weeks, some that have been on the market for a year.  Now we are ready for some new listings.

If you have a house that you need to sell give us a call.  We can help you, and we will give you a choice in how to pay us as well as how much to pay.

Our office number is 907 373–0999 and you will get either Jay or I.  If you want to fax us anything, our fax is 907 745–5486

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Alice Roe of US Bank spent quite a bit of time on the phone with me today  after yesterday’s blog post.  Alice lives in Arizona but specializes in Alaskan loans.  She straightened me out on a few things. 

First, I was wrong that a mortgage broker’s compensation is not disclosed.  Alice said that it is disclosed on the settlement statement but often no one pays any attention to it because it is not shown as a cost to either the seller or the buyer.

She also pointed out something very important that I should have spent more time on. 

That is the fact that it isn’t so much the amount that your lender is paid, but what they can deliver to you that is important. Loan professionals are not commodities.  By that I mean that they are not all created equal.

For example, pork bellies are a commodity.  If you invested in a shipment of pork bellies from the Chicago Mercantile Exchange, hopefully you would sell them before you actually took delivery.  But if you couldn’t get them sold in time, you should be pleased to know that the 20 ton shipment of pork bellies delivered to your front door meets all the qualifications of every other 20 ton shipment of pork bellies.  It’s a commodity that you can count on. 

It isn’t true that one loan professional is the same as the one in the next office.  Some have more experience and can find a good loan for you when others might not.  Some will think about the fact that you know people, who know people who will send their friends to them if they treat you right.  Some don’t really care and only are interested in the fact that they can make money if they get you a loan.

You should find a lender that can really help you.  Ask your friends, ask your Realtor, ask your family about people that have helped them find a good loan at a fair price. 

Or course Realtors are not commodities either.  If you are looking for someone that will listen to you and not just try to sell you something give me a call (907 232–7900), or drop me a note.

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Back in the early 90s when I first started in real estate someone thought it would be a great idea to train real estate agents as mortgage loan brokers as well.  The thought was to have a one stop office.  Lets just have them find a house and get their loan from the same person.

I was brand new in real estate and the obvious conflict of interest didn’t even occur to me so I signed up.  I took the training and learned a lot about how mortgage brokers work and how they make money.  It was the making money part that made me decide to step back out of it. 

But I did help two friends refinance their home.  They got unbeatable loans because I personally and purposefully didn’t make a dime on the deals.  I did not charge them any loan fees and priced their loan at par, which was the lowest interest rate quoted to me by the company.  Basically, they got the wholesale rate.

I learned that mortgage brokers have a lot of control over how much money they make on each loan.  They can charge fees to the borrower that are shown on the good faith estimate and on the settlement statement AND they can make money on the “back side” of the loan that is not disclosed anywhere. 

It is very possible that a mortgage broker could charge no up front fees at all on the loan and still make more money that another lender who charged a 1% loan origination fee.  According to Karen George in Arizona it is possible to make as much as 5% on a conventional loan.  In fact even more can be charged for a sub-prime loan.  Most of the local lenders don’t make anything close to this amount, but they should still tell you how much they are charging.

Why is it important to know how much your lender is making?  Because YOU are paying the bill.  The money that is going into the lender’s pocket is coming out of yours even if you don’t know it.  I think people should be paid for the work they do, and they should be paid fairly.  But I think it’s fair that we know how much we are paying for a service.

Most but not all of the local lenders I talked with were very defensive when I asked them how much they made on their loans.  Apparently most of the local mortgage officers, (as opposed to mortgage brokers), don’t have much control over how much they are paid.  But they still didn’t like talking about it. 

There were three people that did seem open about discussing this with their clients.  These were Tara Murdoch-Barnes and Jo Oxentenko of Wells Fargo Home Mortgage,(376–2308), and Kirsten Forbess of Alaska USA Mortgage, (352–8306).

If you have read this far, it means you are interested in this subject.  If so, check these two websites out that were recommended by a local loan officer friend:

• http://www.searchlightcrusade.net/ 
• The Mortgage Professor

Some may say ‘what’s good for the goose is good for the gander”,  how much are real estate licensees paid?  I’ve discussed that before in commissions.  But there are some things most people don’t know about how Realtors are paid and that is a subject for tomorrow’s blog post. 

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Here is the Monday Morning Market Memo…coming to you on a Monday evening.  We went camping this weekend and just got back around noon today.  I’m lucky to even get this out while it’s still Monday.

The big news this week is…the Total Active Inventory went DOWN !.  By a total of one house.  We listed more than we pended but quite a few houses came off the market this week by cancellations, and expireds as well.

Otherwise, everything is still remaining pretty steady.  The total pendings is up a little but not much.  The market is still moving with buyers obviously having the upper hand.

Looking at our personal inventory of listings, we had 4 houses pend last week.  They all pended at close to their asking price.  We are now doing inspections, and appraisals on these houses.  So we are plenty busy.

I’ve been getting a lot of inquiries about our new consulting options.  I had a call this week with someone exclaiming about how high another Realtor’s commission was.  We charge high commission too, if that is what you choose to pay.  With us, it’s your choice, you can choose the level of service that you need and want to pay for.  Just give me a call if you would like some options in real estate. 

My number is 232–7900 or email me.

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For years I have tried to think of ways to give people more options on how to accomplish their real estate goals. I have experimented with different approaches over this time but only recently discovered ACRE.

ACRE, (Accredited Consultant in Real Estate), is a new organization of Realtors whose goal is to provide a more transparent relationship between the consumer and Realtor. Take a look at the Consulting Times so that you can understand more about this new real estate model.

It was started by a group of Realtors that included Mollie Wasserman who wrote the book, Ripping the Roof Off Real Estate.

It seemed to fit the way I want to work and so I signed up and now am the only Accredited Consultant in Real Estate in Alaska.

My brother Jay and I have been discussing our fee schedules and now can give options to our clients. There are many different scenarios where you might need a real estate consultant rather than a full blown commissioned Realtor.

For example, perhaps you want to market your home yourself but just need some coaching along the way…we can help.

Or maybe you and a co-worker have already agreed on the basic terms of a sale but would like some guidance to put together a good contract…we can help.

Perhaps you are interested in a home that is for sale buy owner and would like some assurance that the asking price is reasonable…we can help.

If you want your house on the MLS and help in negotiation and management of a transaction, but can handle the rest yourself…we can help.

In fact, we can provide a full blown marketing package with price research, MLS, representation, and transaction management on a consulting basis that will still cost much less than a normal commission structure.

Jay and I have over over 26 years of combined real estate experience in the Matanuska Valley. We know how it works and do this full time.

You will NOT hear any canned sales lines from us. We don’t spend our time practicing sales scripts and role playing them on each other so that we can manipulate you into doing what we want you to do. We do not pressure or manipulate you to do anything.

We feel that our role is to LISTEN to you, and then to try to help you meet the need that you have.

In other words…we “CONSULT WITH YOU, NOT SELL YOU”.

Give us a call at 907 373–0999 or drop us an email in you are interested in hearing more.

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I thought I’d begin a new category about good businesses in the Matanuska Valley. I plan to only mention businesses that I use and like. This list will grow over time as I think of people I miss and add them. I also plan to post a special page about them as I have time.

Allstate Insurance, We have used Cindy Heal’s Office, ( 746–0505), and Stan Tebow’s Office, (746–6970). They are both located on the Palmer-Wasilla Highway

Joe Meyer, Finish Carpenter, Remodeler. When I can get him, I hire him for fix up work in houses.

Neil’s Lock and Safe, 373–0961 Locksmith services and Neil also sells gun safes.

Rock Ridge Services, 357–1556, Full service landscaping. They can handle it all. I believe they also do snow removal in the winter.

Schuetter Trucking and Excavating. 746–4133. If I need any digging done, or topsoil hauled, I call Schuetter Trucking.

Diversified Tire, 376–2700. I have been bringing my car to Dave and Judy Snyder since they started with a one man one woman shop. They do all kinds of tire work and also mechanic work.

Lazy Mountain Enterprises. 745–3068. I take my cars to him for repairs. He is honest and fair.

Mr Lube. 373-4645. I get my oil changes and sometimes some minor repair done here.

Slacks Sugar Shack, Great Bakery in Palmer. Nedra Slack makes the bread I deliver every Thanksgiving.

That doesn’t mean there aren’t other good businesses in the valley, it just means that I have used these businesses and like them. If I’ve used your business and didn’t include you drop me an email.

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Here are the statistics for the Matanuska-Susitna Borough for this week.  This includes only single family homes.  It does not include condos, mobile homes, multi-family homes or land.

The inventory grew by only 3 additional listings compared to last week’s Market Memo.  That would be encouraging if we didn’t also see a fall off in pending and closed sales. 

Our personal business has been booming with about as many pendings and closing as we can handle.  I believe we are closing four this week, two last week and four the week before.  Those are not all single family sales, but most of them are.

The market has been generally steady all summer with about the same amount of closings and pendings as we go along.  Pendings and closings are on the low side this week, but they are not below average.

This house was shown 5 times in one day on July 5th.  It has been shown about once a day on average since it was listed.  It received two offers last week and is now pending.  That is a good illustration of how a well-built house, presented well by the sellers, will attract buyers in this market. 

The market is holding steady and houses priced right, and presented right, will sell.

Give me a call if you would like to hear more.   907 232–7900 is my cell.

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There were about 40 entries for this week’s Carnival of Real Estate.  That may be a normal amount for all I know but there was a lot of good writing to sort through.  I feel a little inadequate after reading some of these great articles.

I sorted them into four categories:  Real Estate Agents, Mortgages, Technology and Other.

Real Estate Agent Category… I had to give Broker Bryant first place.  He had my whole family in stitches.

Lead Or Prospect, Are You Buying? by Broker Bryant at BrokerBryant.com

Market Your Home Like A Rock Star by Brian Miller of RealEstateEntropy.com

Top 100 Reasons To Use A Real Estate Agent  by Michael Krotchie at michaelkrotchie.com

Salesperson or Consultant by Sandy Kaduce at northsoundpropertynews.blogspot.com

Mortgages

Just Because Compensation for a Loan Isn’t Disclosed Doesn’t Mean It’s Free by Dan Melson at searchlightcrusade.net

The 3.6 Million Dollar Mortgage by Tim Abbott at abettermortgage.typepad.com

Technology

How The I-Phone Can Revolutionize Real Estate by Oliver Muoto at vflyerblog.com

To Map or NOT to MAP - That is the question? from realtorgenius.com

Other Real Estate Related

5 Things Buyers Should Never See in Your Listings by Kimbely Wester on Active Rain

Building an audience: Using blogging, social networks, email newsletters and viral marketing instead of SEO by Brian Brady on Bloodhoundblog

Does Size Matter: How Small A House Are You Willing To Live In?  from thedigeratilife.com

Housing and the age of Affluence from drhousingbubble.com

Transparent Honest Negotiating by Christopher Smith at EquityScout.com

I felt that everyone who contributed should be listed, so here are all the other blog posts.  Some of these are likely as good or better than the ones I chose.  It depends on your perspective. 

Check them out:

Seven Ways to Tackle The Garage by Jennifer Steck at centraldenverblog.com

Motivated Seller, Come Back Next Year by Aaron Dickinson of Aaronsold.com

Home Pricing Strategies by Ben Kinney on Active Rain

These Ladies Mean Business by Dr. John Yacenda at renorealestatevoice.com

Why Real Estate Is Bubble Proof by Tonja Demoff at TonjaDemoff.com

Condo-Hotel Concept Is It Worth Checking Out? from Plus6.com

10 Mistakes Everyone Makes When Buying-Selling Real Estate by Ant at TheBeefJerkyBlog.com

Exploring A Slice Of Subprime Space by Niki Scevak at blog.fortiusone.com

Time To Buy Or To Buy Time by Matt Johnson at zillowblog.com

Why Build a Custom Home by Mark Donovan at homeadditionplus.com

Does a Bi-Weekly payment plan save me enough money to make it worthwhile? by John Barker at barkerblog.com

7 Steps To Buying A Home by Doug Trudeau at tucsonrealestateblogs.com

What Housing Derivatives Really Mean For You by Fritz Siebel at housingderivatives.typepad.com

Stocks Versus Real Estate Investments by David at ww-success.com

Almost Debt Free: How to Save for a Down Payment on a Home by John at queercents.com

Is George Washington Selling Your House by Toby Boyce at delawareohrealestate.com

Ask The Agents: Where Are The Good Neighborhoods? by Jay Thompson at pheonixrealestateguy.com

How Much Is Your Home Worth? by Andy of moneywalks.com

How Much Should Your Monthly Mortgage Be by Tushar at residentalien.blogspot.com

Why Redfin Will Succeed by Lani Anglin at realtorwives.blogspot.com

Real Estate Search Marketing, A VC’s Take by Cliff Jacobson at webhomeusablog.com

If You Were Designing The Real Estate Industry From Scratch, Would It Look More Like Coldwell Banker Or Redfin?  by Kevin Boer at 3oceansrealestate.com

Inspire Me! 2 Tips and a Website by Shaun McLane at poshd.com

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