The Shopper: Mike Buder

Mike Buder

Expose Agent Stats?
Updated: September 09, 2016 - 1:54 pm

What is so taboo about asking the question “how many homes like mine have you sold in the past year?” It is a simple question, but all too few agents will give you a number. Oh, they’ll tell you they have been a triple micronium producer or on a top team, whatever that means. It all sounds great. But here’s the deal: 90% of all the listings are sold by 10% of the agents. I’ll put it another way: in Lansing, Illinois there are 22 real estate companies and a total of 66 licensed sales people. In the month of July, those 66 sales people sold exactly 7 single-family homes in Lansing. There are 245 active listings, so there are plenty of people who listed with someone who somehow finessed the fact that they haven’t sold much of anything in a dog’s age. They might have stated that they work for a big company, productive office or some other larger truth that obscures the reality that they themselves are not doing very much. The problem here, and take it from a Realtor that lists dozens of expired listings each year, is that all that flowery gibberish breaks down when the seller realizes that the 2004 top office producer award means nothing in 2016, or 30 years in the business can really be one year repeated thirty times. Sad to say, but many agents have not adjusted to the market and industry changes of recent and they refuse to admit it isn’t 1996 anymore.

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The Price Is Wrong
Posted: August 31, 2016 - 1:48 pm

I have been thinking about contacting the television networks with an idea I have for a new real estate reality T.V. show called “The Price is Wrong”. It would be a remake of the long running “The Price is Right” now hosted by Drew Carey. My studio audience is filled with hundreds of frustrated sellers batting zero. Frustrated “For Sale By Owners” cranky “Cancelled Listings” and exhausted “Expired Listings” in addition to “Agitated Agents” compete for the right to sit in the studio audience. Several lucky contestants will be selected to pick one of three doors on stage, which indicate why the property did not sell. In order to attract the attention of the game show host, the audience members are cleverly costumed in revolting real estate attire. Lime green shag sweaters, dresses with pet odors, textures and colors that don’t match are a few examples. Some sit in the aisles to mock poor locations. Others go without bathing for days to suggest unclean rooms. One shrewd seller comes as a converted garage/family room. But every guest says they are unaware of why the property remains unsold. As the studio audience jumps, shouts and hollers for recognition, the T.V. host selects one lucky contestant who will be offered a small prize, or the opportunity to open one of three doors on stage. The door is usually selected because it contains the answer to everyone’s question, “Why isn’t my home selling?” The amazing fact is that behind each and every door there is a large colorful sign that reads: THE PRICE IS WRONG! Reluctantly, the seller realizes the lack of offers, the lack of showings, the feedback, the buyer comments, the listing agent calls and the newspaper articles were all correct after all. That’s what I like about my new real estate reality T.V. show. It confronts the modern myth that “a person’s home is their castle”. Some things are priceless and others should be priced less. 

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Thank You For Your Honesty
Posted: August 23, 2016 - 1:37 pm

It amazes me that there are still real estate agents out there that don’t seem to get that being completely honest with a home seller may be hard, but it’s the right thing to do. Not long ago, I heard from someone who had been trying to sell their Lansing home for a long time with no success. They asked me to take a look at the house and give my opinion on pricing it for today’s market. When I visited the home, I found several items of deferred maintenance that would keep the house from attracting the most qualified buyers, especially the FHA and VA buyers that are making up the majority of home sales in our area. There were lots of little things to do and it’s my practice to let sellers know about everything that could be improved, explain why they need to be improved and recommend the most critical things to be addressed before a house goes on the market.

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Flipped vs. Rehabbed
Posted: August 17, 2016 - 10:34 am

Lately I’ve seen a big difference between “flipped” homes and “rehabbed” homes. And while a rehabbed property might also be flipped, a flipped house doesn’t necessarily have to be rehabbed. With more and more homes being sold to investors, there are a lot of houses being flipped in today’s market. Not to say there’s anything wrong with that…there’s nothing wrong with earning a living or making money. But what I’ve noticed recently are the “fix and flips”. Perhaps a property is swooped up for a good price in a distressed sale situation. The owner has no intention of living there and does put in some sweat equity/elbow grease. Then places the property back on the market. If done correctly, the home will look great. If done incorrectly, the home will look like a rental property. Some of the fix and flip homes I’ve looked at are terrible. The quality of work is just not there and it’s noticeable. The homes are dated with maybe 70’s cabinetry, counter tops have gold leaf veining running through the Formica, dark wood floor boards and door frame moldings, aluminum cased windows, a fluorescent light fixture dangling in the kitchen. Oh sure, the carpet is new…there is fresh paint on the walls, and the property is clean as a whistle. But the work looks…well, like someone painted, cleaned and re-carpeted…nothing more. A quality rehabbed house shines. The flooring is refinished to bring out the hardwoods natural look, the cabinetry has been updated, the counter tops are replaced with hard surfaces, the dark trim has been replaced or repainted, the doors have been updated to six panel, appliances have been updated and the systems have been updated as needed. Perhaps electrical, plumbing, HVAC, roof and windows all have been done.

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Cut the Cord
Posted: August 10, 2016 - 11:15 am

Your emotional attachment to your house can cost you big $$$. Our homes are very personal to us. Thinking of my grandmother’s home brings warm happy feelings, as does my childhood home. And when I move the next time, I’m sure I’ll be emotionally attached to my current home…it’s my wife’s and I first home together, the one where my children learned to walk, talk and write on the walls with permanent markers. But when it comes time to sell, you have to move outside the feelings of your “home” and sell your “house”. 

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“Occupancy” Plan B?
Posted: August 04, 2016 - 2:45 pm

Planning to sleep in your new home tonight…what’s Plan B? It’s closing day! Everything has gone like clockwork and you have nothing but the closing between you and home ownership!

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License to Buy
Posted: July 27, 2016 - 12:27 pm

The other day I received a call from a potential buyer and spent a considerable amount of time answering his questions about short sales, foreclosures and the process of buying a home in the South Suburbs. As we wrapped up our conversation I re-iterated that his next step, since he would be financing his home purchase, would be to get pre-approved by a qualified lender. That’s when the conversation changed direction. Mr. Buyer didn’t feel that this pre-approval was necessary. I mean the last time he checked his credit score was in the mid 600’s. The fact of the matter is Mr. Buyer, what you think your credit score WAS means nothing to me. There are a lot of factors that go into the pre-approval process and it’s important that you, as the buyer, know exactly where you stand with the terms of the mortgage. How much will you be putting down? What type of financing will you be getting…FHA, VA or conventional? And, what is the loan amount you will be approved to receive…today that is. It doesn’t do any good to show you homes you may not be approved to buy. In order for a seller to take you seriously, a loan status report (LSR) from a lender must accompany any offer you make. This pre-approval form will ensure that you, your lender and I are all on the same page. Think of your LSR as your “License to Buy”. This is my business practice, Mr. Buyer. I do not show homes to buyers who are not willing to go through the painless process of speaking with a lender to be pre-approved. This can often be done over the phone and this is where all serious buyers who are financing their purchase in today’s market must start.

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“Ugly” Vacant Homes
Posted: July 22, 2016 - 2:13 pm

Vacant homes do not stimulate the economy…and they’re “ugly”.

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Are You Show-Ready?
Posted: July 13, 2016 - 12:43 pm

While showing homes the other day, I began to wonder why so many occupied homes are not properly prepared for showings.  Most sellers know in advance that their home is going to be shown.  When you get that call, it’s almost “show time”.  Have a plan of action to get your home in “show-ready shape”.

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Put The Right Hat On!
Posted: July 07, 2016 - 9:18 am

In today’s real estate industry, mortgage rules and the way business is done change daily. Whether you are a buyer, a seller or a real estate agent you need to expect problems. Are you and your agent problem solvers or solution seekers?

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Strategic Default = Bad Strategy
Posted: June 29, 2016 - 1:09 pm

We are hearing more and more about strategic defaults, but is this a good option? First, let’s look at the difference between a “regular default” and “strategic default”. A regular default occurs when the homeowner experiences a hardship, such as job loss, divorce, medical bills, etc. They find themselves unable to make their mortgage payments. A strategic default is where the homeowner finds that their property is no longer worth what they owe and they make a decision to just stop making their monthly mortgage payments and walk away. These homeowners can afford to make the monthly payment but they make a decision to default. They think that they can raise their credit scores by paying all of their other bills on time and eventually finance another home purchase. Don’t count on it! Homeowners that default due to a hardship normally must wait 2 to 5 years before buying a home again, walk-aways may be facing double that time. It could be as long as 8 years before a strategic defaulter will be able to buy again.

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Agent In Training
Posted: June 22, 2016 - 2:06 pm

Everyone is a “newbie” at some time. We see managers training the teenager at Taco Bell or the “student driver” signs atop of cars. But when was the last time you saw a “real estate professional in training” badge on a real estate agent or loan officer? Never! A good real estate company will hold an agents hand during the “baby” stage. And a good lender will make sure a complete mortgage application is completed for a new loan officer. Sadly what often takes place is a “sink or swim” training method and some poor soul’s home purchase is the training ground. We’ve seen this with both newbie real estate professionals and often with the “I’m using a relative” scenario. Is it a fair question to ask a professional how many transactions they have completed lately?…this year?…ever? ABSOLUTELY! 

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Dear Mr. Seller...
Posted: June 15, 2016 - 10:55 am

Dear Mr. Seller, 

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Appraisal Issues
Posted: June 09, 2016 - 10:08 am

In the South Suburbs of Chicago as well as many other parts of the country the lender’s appraisal becomes the litmus test to the price negotiated between the buyer and the seller. Fair market price is normally determined when a seller and a buyer who aren’t under duress negotiate and agree on a contract price for the sale of a property. If the buyer is cash and doesn’t need a lender then that’s it. In most cases, an appraisal isn’t done at this point, because the buyer and seller agree on the value of the property. If the buyer does need a lender, as most do, then the bank has to have a way to document the market value. That’s where the appraisal comes in. An appraisal is one person’s opinion of what a mortgage lender should be prepared to lend on a particular property, based on the recent history of sales of similar properties. 

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A Real Estate Pro
Posted: June 01, 2016 - 1:55 pm

In every profession, there are people who stand out in their field and they are called professionals.  They are men and women who possess the education and distinctive qualities of their trade with confidence.  I have seen professional cooks, electricians, plumbers, doctors, nurses, bus drivers, military personnel and many others who change your life just by being professional in what they do.

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SOLD or SO-OLD
Posted: May 25, 2016 - 1:52 pm

Today I found 204 homes in the immediate South Suburbs of Chicago that have been on the market for more than 365 days. An entire year or more in the MLS for sale! 45 of those homes have been actively on the market for over 2 years. Can you imagine? Two years of keeping your home clean, having a lockbox on the door and leaving your home so realtors can show it!

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Unsolicited Offers
Posted: May 17, 2016 - 1:23 pm

You come home from a long day at work, and there it is…a letter in your mail box saying that someone wants to buy your home.  Of course, then you realize they’ve never even been inside your home.  So how serious can they possibly be?  Today, you will find many “Cable TV Investors”, and even some real estate agents resorting to writing letters to people whose homes are not listed for sale.  Agents may write that they have some buyers for your home and ask if you would be willing to open up negotiations to sell.  Sometimes the investors will write letters about how they’ve been unlucky in house hunting, and they love the way your house looks on the outside and “they want it”.  

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Can Real Estate Be Fun?
Posted: May 12, 2016 - 12:46 pm

Buying and selling real estate is often stressful. It does not have to be that way. Buyers and sellers want the same thing – “A good deal”. Oh, maybe that is the problem. Unrealistic expectations of what a property is worth and petty holdouts can scuttle many deals. Whether a seller or buyer be, do your research and get professional advice. Sellers need to understand and accept what their house is worth today. It may have no relation to what it could have sold for in 2005, how much they owe, how much they paid for it or how much work they put into it over the last 10 years. A home is only worth what someone is willing to pay for it. All the analysis means nothing if nobody will buy it. Part of the difficulty in setting a price is due to the lack of similar “sold” homes to use as comparables. Short sales, bank owned and fixer uppers are rampant in many neighborhoods and can negatively affect price comparisons.

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Why Do Buyers Low Ball?
Posted: May 04, 2016 - 12:32 pm

I’m often asked by sellers “what are these people thinking?” when a low offer comes in. The easy answer is “they aren’t thinking”, but the real truth is far more complex. At the heart of it all is always self-interest, which is the very same reason why sellers want to get the most money for their homes. The following are some motivations for buyers to low ball.

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What’s Price Got To Do With It?
Posted: April 27, 2016 - 1:01 pm

In 1984 Tina Turner released a number one top single titled “What’s Love Got To Do With It”. I think Tina should release a remake of her classic hit. The new version can be dedicated to stubborn sellers who refuse to lead the market with a competitive price. The new song would be entitled “What’s Price Got To Do With It?” Everything, Tina would reply in her timely tune.

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Thank You Neighbor
Posted: April 19, 2016 - 10:07 am

Are you selling your home or just helping your neighbors sell theirs? There are a couple kinds of people who help their neighbors sell their home. The first kind is the neighbor we all want to have. Their yard is perfectly landscaped, the trash cans are never left out by the curb, the cars are tucked safely into the garage instead of parked on the street, they don’t have dogs that would even think about barking or cats that consider your garden a litter box. They are friendly, courteous and can’t wait to tell anyone they meet what a great neighborhood they live in, including the people who are considering moving to the block. They are the cheerleaders for the community, make everyone feel welcome and are the best advertisement for a new neighbor you could ever hope for.

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On The Market VS In The Market
Posted: April 13, 2016 - 9:50 am

There is a big difference between a seller being on the market VS being in the market. To put a home on the market a seller hires a real estate agent to list their house for sale. If that home is in the market, agents and buyers view the property and make offers to purchase it. A fishing analogy would be if the bait is floating on top of the water, but the fish are in the lake 25 feet below, the fisherman will get a nice suntan but will not hook any trout. The wise angler will continue to lower his bait until the fish begin to bite. A novice will curse the fishing guide, and consider taking up golf as a new hobby.

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Your House Stinks
Posted: April 05, 2016 - 1:22 pm

Sorry if I offended you…but your house stinks. Houses smell. Yep, every single one. Oh, they don’t all smell bad…but they all carry their own fragrance. A fragrance called the death of a sale if it stinks. Unfortunately, in the grand scheme of preparing a home for sale, house smells are the last thing that sellers seem to think about. Probably because I have yet to meet a seller who smells their own stinky home. Not once has a seller said to me “I know my house smells bad”. No matter how diplomatic an agent tries to be when listing a stinky house, telling a seller their home smells bad seems to offend them more than telling them that their home is worth less money than they thought.

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False Promises
Posted: March 29, 2016 - 9:38 am

About a year ago I went on a listing appointment. The seller was referred to me by a past client of mine. I thought that would give me the edge against the other Realtor she was talking to…but it didn’t. The listing appointment itself was awesome! I instantly felt comfortable with the client, and she felt comfortable with me because of all the nice things my past client told her about me. She also said that she felt like she already knew me because she had been reading my weekly column over the past few months. I toured the home and now it was time to get down to business. We sat down at the dining room table and I talked to her about my marketing plan, my brand and what I have to offer a seller over my competitors. Then I suggested that she needed to de-clutter just about everywhere, and repaint a couple of the bedrooms. She really didn’t like that idea. Then we talked price and she didn’t like that either. She was hoping for an amount that was approximately 25% higher than the current comps indicated. She thanked me for coming and we parted ways. I was pretty sure that she wasn’t going to list with me…I was right. She emailed me the following morning: Sorry Mike, I’m going with the other Realtor and here are the reasons why…1. He told me that I didn’t need to do anything to get my home ready to list. 2. He said he would sell it for a drastically reduced commission since I am probably buying something else as well. 3. He said that he could get me the amount that I want for the home and 4. He told me that he can sell it quick! I thanked her for the opportunity to meet with her and wished her well. No harm, no, foul, no worries…You can’t win them all.

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DOM?
Posted: March 29, 2016 - 9:15 am

What is DOM in real estate and what does it mean? Sooner or later prospective buyers and sellers come across the abbreviation DOM and ask what is hiding behind this real estate jargon. The short answer is: DOM stands for days on the market and indicates the number of days a property has been on the market for sale. The DOM of a listing will start accumulating from the day it is entered in the multiple listing service (MLS) and it will continue to add up until the property goes under contract. There are a lot of properties on the market that just sit and sit and sit…and consequently accumulate quite a number of DOM. Then there are those properties that as soon as they are listed, get showings and offers…and the DOM are short. How useful is days on the market data? The DOM is a very useful tool to demonstrate to sellers the disadvantage of overpricing. By simply looking at the listing history of a property, it will often provide a case that the home could have sold sooner if it had been priced right. Also what about all those price reductions before it finally got an offer? Could it even have sold for a higher price if the initial list price had been in line with the market right from the beginning? Many buyers today want to know the total DOM of a home before they make an offer. Why? Because they are trying to gauge the motivations of a seller and “how desperate” a seller might be by the number of days on market. Recently I listed a home that went under contract after only six days. Although delighted, this caught my seller a little bit by surprise especially since another home on her block had been on the market for a long time without receiving an offer. I explained to her that her home sale was different. All the conditions including pricing, condition of the home, timing of the market and the marketing itself, were right. Then I pointed out the fact that the shorter time on the market also meant relief from the expenses for upkeep, maintenance and property taxes. My seller was very happy as she was looking forward to her quick closing with renewed confidence.

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Memories And Money
Posted: March 15, 2016 - 10:52 am

One of the first questions someone naturally asks themselves as a renter is, “why should I become a homeowner?” There are many reasons, but probably the first one is the pride in knowing that you have established a foundation for building personal wealth as well as a basis for future memories.

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The Truth
Posted: March 08, 2016 - 9:17 am

TRUTH IN ADVERTISING. Simple concept, but in the real estate world it can get complicated. The temptation to embellish is sometimes irresistible to a home seller. This is a formula that will for sure frustrate buyers and alienate real estate agents that show your home. Recently, I was showing a home to a couple that has a large family. We have been on the hunt for a 4 bedroom home in their desired location for quite some time. When we walked into a home with a large enclosed sunroom with a closet, the husband said “I hope they aren’t counting this as the 4th bedroom!” and it hit me how many houses we’ve seen that claimed to have 4 bedrooms and really did not. Here was a family that really needed 4 bedrooms, not 3 bedrooms and an office, not 3 bedrooms and an attic space you could build out, but 4 bedrooms. They’d seen it all in terms of creative advertising, and not surprisingly were getting a little jaded. As a real estate agent, I’ve seen it all. I’ve seen vacant lots classified as single-family homes---“Oh, you want a house with that?” Not to mention advertising features that did not even exist in a home. Buyers do not want to look at blueprints and un-filed permits. The seller’s side of the equation I think is also very negative. Watching day after day of buyers trot through your home and reject it can be disheartening (and make you feel unnecessarily desperate). You’re going to start thinking that people hate your house. When in reality they just hate that it doesn’t have a gourmet kitchen…like you said it did. Now ultimately, unless you suddenly decide to upgrade, the buyer for your home will have to be okay with Formica countertops and vinyl floors. Trust me, people buy homes with Formica countertops and vinyl floors every day. The key is to attract buyers who want the attributes that your home actually has. By simply painting an accurate picture of your home in advertising, you will avoid frustrating buyers, alienating buyer’s agents, and wasting your own time.

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Realtors, “We’re Not Perfect”
Posted: March 01, 2016 - 11:43 am

What makes a great Realtor? Certainly not perfection. There is no such thing. My feeling on this is that if you actually try, try, try and do your best for your clients that even if you are unsuccessful, you have not failed. If you do your best and put your right foot forward, remain honest and sincere and place your clients’ needs first and foremost, truly work to do the right thing even if it means losing a commission, then you are one of the best.

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Pricing to Sell
Posted: February 23, 2016 - 10:02 am

“If it sells to quickly it was under-priced to begin with!” This is what my seller said to me yesterday when we were discussing his price point. I said “excuse me?” and he repeated it, nodding his head up and down. I quickly thought of my most logical response to this myth and said “what do you feel is a reasonable amount of time on the market before it sells?” Well, I don’t know”, he said “but under 10 days is too short!” I quickly went into the process of selecting a price. FIRST, I talked about our competition; all the other homes on the market will let us know where we stand in the grand scheme of things and determines our absorption rate. The absorption rate tells us what has sold and how many homes are currently available and how long it should take to sell this home. SECOND, I talked about pricing it right from the beginning and I used him as my example. When they bought the home from me, as we were looking at homes, if a home was on the market for a long time their first question to me was “what’s wrong with this home?” Most times I pulled up the history on it and sure enough the seller has it priced to high from the beginning. THIRD, is the list to sold priced percentage which helps us determine where homes were priced when they went on the market vs. how much they sold for. Clearly this shows how realistic folks are from the get go on their homes. I am not in the business of putting an overpriced home on the market and letting it sit there for 6, 9, 12, or 24 months. I like to come to an agreement on the price point of the home based on the above criteria and let it sell. That’s our goal, right? In my opinion if a home sells in one, three, five or even 20 days, it was priced right from the beginning. There are a variety of things that come into play when determining the price of a home. Two majors are location and price. You can’t change the location, but you can make your price very attractive without “giving it away.”

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Emotionally Attached
Posted: February 23, 2016 - 9:38 am

When it’s time to say goodbye to a house you love. I remember being very impressed with the property on my first visit. The 100 year-old farm house shone with careful restoration and charm. The acreage that surrounded it was dotted with heirloom fruit trees and organic pathways winding through a variety of flower and veggie gardens. The owner, and mother of one of my recent clients, wanted my opinion as to its value. True comps were hard to find, but we came up with a plan for pricing. However, after a long interview, we determined she wasn’t emotionally ready to sell. Our relationship developed into a warm friendship, and two years later she finally was ready to say goodbye. Years of taking care of the house on her own (after her husband died) had taken its toll. She longed for a new vision and new adventures. It didn’t take long to get an offer, and fortunately it was a cash buyer with plenty of motivation. The couple, who owned and adjacent property, wanted to buy the house for their daughter and son-in-law. Getting a loan on the property might have been difficult. It’s a built on a skirted post and pier foundation. In addition, at the time, there was no heat source to the second floor bedrooms. The process of selling was an emotional one. The property was filled with memories-her children had played in the nearby creek, her daughter’s wedding was held in one of the gardens, a dog was buried underneath a tree in the back yard. At times, it proved difficult to walk that fine line between friendship and a professional relationship. Fortunately, her son and daughter, also both excited for their mom’s freedom from the upkeep of the home, helped through the difficult moments. The children threw a birthday party for their mom, the weekend before she moved out. Guests gathered in the gardens on a warm summer day and enjoyed libations, delicious food, and shared fond stories. It was the perfect time to say goodbye to a well-loved home.

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Stop Thinking Average
Posted: February 15, 2016 - 10:13 am

“Should I wait until the spring market and warmer weather before I list my home for sale?”  As a Realtor in the south suburbs of Chicago, I get asked this question all the time.  My response is quite simple…“If you can list your home now, you really should.”  And the reasons why are equally simple:  1. Low inventory 2. Continued demand.  Our local market has become a year round market.  Sure, more people do move in spring and summer but traditional sellers have an opportunity to shine if they list their homes when there are mostly distressed homes on the market.

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Listing Season
Posted: February 03, 2016 - 1:55 pm

The biggest mistake some folks make when selling their home is not listing it. Are you going to try to defy all odds and sell it yourself, or are you going to put the odds in your favor by marketing your home with a Realtor in the multiple listing service (MLS)?

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Paying Buyer’s Closing Costs
Posted: January 28, 2016 - 1:13 pm

In today’s real estate market, it is very common for buyers to ask that the seller pay for the buyer’s closing costs. Some sellers are baffled by this request and others realize that this is the way many non-buyers become buyers today. Many times, especially in the case of first time home buyers, they have enough funds for their down payment requirement, but can’t quite swing the closing costs. Since most of the loans today will allow for seller paid concessions, the buyers ask the sellers to pay this on their behalf. This is the case with FHA, VA and most conventional mortgages. Today we see more move up buyers ask for this concession as well. These more experienced buyers would rather finance the closing costs into the purchase price and free up their cash for upgrades once they move in. Let’s say that the cost of financing averages $5 per $1,000. If the buyer rolls the closing cost into their mortgage with an average closing cost concession of $3,000, they are increasing their monthly payment by only $15 per month. Much of this is interest in the first 5 to 10 years of a 30 year mortgage, which in turn is a tax deduction for the buyer. It makes more sense to finance that money, free up their cash and have a larger tax write off at the end of each year. As long as the net proceeds are acceptable to the seller, the seller concessions shouldn’t matter. Many times a first time homebuyer would not be able to purchase a home without this assistance. If a buyer’s original offer is not acceptable, I will usually counsel my seller to counter offer the price and not the seller concessions. If the buyer needs help with the closing costs (concessions) don’t try to eliminate them. Just counter back at an acceptable purchase price leaving the concessions in place and determine the net. It’s all about the funds the seller walks away with at the closing table – regardless of how you get there.

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Agent or No Agent
Posted: January 28, 2016 - 12:59 pm

Some buyers and sellers wonder whether they can save money by not using a Realtor for their home sale and/or purchase. I will do my best to explain the variables for different types of transactions. SELLING A HOME, you will probably be best served to hire a Realtor to list it for you and to represent your interests throughout the transaction. This is known as a “fiduciary responsibility”, and Realtors must abide by a code of ethics which means we are working for you alone, not our own interests or those of the buyer. Realtors must treat everyone fairly, but for negotiations it is very helpful to be represented by a professional. This also applies to exposure for your home. More than 80% of homes sell in the MLS. It will behoove you to have a full-service agent who can help with pricing, photography, staging, marketing, negotiations, inspections (which sometimes lead to additional negotiations), and the closing process itself. If you try to go it alone, the statistics show that “For Sale by Owner” homes eventually end up listing with a realtor around 85% of the time. BUYING A RESALE HOME, you could go directly to the listing agent in an attempt to get them to discount services because you have no agent helping you. They however are under no obligation to give you any of their commission. Additionally, since the listing agent is representing the seller, they are on the other team and working against you with regard to the sale price and repair negotiations, so it could end up costing you more. BUYING NEW CONSTRUCTION, builder pricing normally includes agent commissions. Reputable builders will not discount or undercut Realtors because they bring them a lion’s share of their business.

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Pro-active Seller = $$$
Posted: January 14, 2016 - 9:21 am

Doing some upgrading before selling your home?  Consult with your agent first.  Twice in the last few days I have been called by sellers who will be listing their homes and have been asked for advice on improvements they want to make.  This is a smart, pro-active move on the seller’s part as they want to make their homes as marketable as possible but do not want to over improve and get a little in return for their investment.  Real estate agents are in the trenches, see many, many homes, and are in sync with what appeals to buyers.  Where can you get better advice on what might be done and how it should be done to maximize the return on the investment made?  Two recent examples come to mind, both were sellers that I worked with.  One seller made mistakes in upgrading and the other who did everything right.  Seller A – The work was already done when I was called for the listing appointment.  The kitchen had been upgraded with high end cabinetry, granite countertops, custom tile flooring, a subzero fridge and a Viking 6-burner cook top.  A dream kitchen for the owner; however, this kitchen belonged in a house twice the value of their house.  The house sold, but the sellers only recouped a small fraction of their kitchen $$$ investment. Big investment…small return.  Seller B – This sellers home had a kitchen that was tired and worn out.  I recommended a kitchen makeover which cost less than $6K, including stainless appliances.  The kitchen came out beautifully and the house sold quickly for $20K more than a comparable home that had the original kitchen.  Small investment…big return.  Very happy seller.

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My 2016 Full Disclosure
Posted: January 06, 2016 - 12:37 pm

You may have noticed over the last 6 years that I sign off this weekly column not as Mike Buder Realtor or RE/MAX Agent, but Mike Buder “a local Christian Businessman”.  I have been lectured by some that I should not sign off in such a way because it might offend some people.  Lately it has been brought to my attention that some folks in my industry have attempted to use my Christian faith against me when competing for listings.  That they have said 1.  “He does not work on Sundays” or 2.  “He has younger children that he spends time with” other folks have said 3.  “He will tell you to list your home at a lower price than I will list it for” and 4.  “He will have a higher commission rate than I will charge you”.  To all of these I say:  “Guilty as charged”.

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New Year – New Agent?
Posted: December 29, 2015 - 1:08 pm

Meet the new agent…same as the old agent…of course this is a play on “meet the new boss, same as the old boss.”  What I am addressing here is that many people think changing real estate agents will help a listing that is not selling.  They think one agent is a good as another, so if one doesn’t “perform” then we just move onto the next.  Commoditization of the work force seems to be the order of the day – so it is somewhat natural that buyers and sellers would treat real estate agents the same way.  

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Christmas Giving
Posted: December 29, 2015 - 12:55 pm

I ask, what is your definition of giving during this Christmas season? Christmas is celebrating the life and birth of Jesus Christ who gave his life for us – for our sins…hundreds of years later we celebrate this with an abundance of gifts in a material form that society tells us we have to – to sustain the prosperous economy. To compete with the Jones’, to have the next best thing for the year, to show your love through a price tag, style, or brand. Is this truly giving or multiplying what you’ve been doing throughout the year for the loved ones surrounding you (wife, kids, sister, mom, etc.)? Are they in “need” of 8 gifts under the tree totaling $800.00, racking up your credit card debt and most likely ending up in the back of the closet or donated 6 months later. Please – remember what Christmas is all about. Christmas is not about going into debt financially and emotionally. It is about helping the elderly neighbor shovel her walk, giving that extra change or dollar in the bucket for the frozen volunteer ringing the bell outside of the store your walking out of. Christmas is giving your time to donate to the local shelter whether it’s blankets, money or service. How about giving blood to the American Red Cross (they have great cookies). Since the time of Christ’s birth, the spirit of giving gifts has been present in the mind of each Christian as he or she commemorates the Christmas season. Our Heavenly Father gave us his son, Jesus Christ. This precious son gave us his life, the atonement and victory over the grave. What will you and I give for Christmas this year? Let us in our lives give to our Lord and Savior the gift of gratitude by living his teachings and following in his footsteps. It was said of him that he “went around doing good” (Acts 10:38). As we do likewise, the Christmas spirit will be ours. 

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The Christmas Story As Recorded By Dr. Luke
Posted: December 22, 2015 - 9:03 am

And it came to pass in those days that a decree went out from Caesar Augustus that all the world should be registered. This census first took place while Quirinius was governing Syria. So all went to be registered, everyone to his own city.

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Christmas Giving
Updated: December 22, 2015 - 9:03 am

I ask, what is your definition of giving during this Christmas season? Christmas is celebrating the life and birth of Jesus Christ who gave his life for us – for our sins…hundreds of years later we celebrate this with an abundance of gifts in a material form that society tells us we have to – to sustain the prosperous economy. To compete with the Jones’, to have the next best thing for the year, to show your love through a price tag, style, or brand. Is this truly giving or multiplying what you’ve been doing throughout the year for the loved ones surrounding you (wife, kids, sister, mom, etc.)? Are they in “need” of 8 gifts under the tree totaling $800.00, racking up your credit card debt and most likely ending up in the back of the closet or donated 6 months later. Please – remember what Christmas is all about. Christmas is not about going into debt financially and emotionally. It is about helping the elderly neighbor shovel her walk, giving that extra change or dollar in the bucket for the frozen volunteer ringing the bell outside of the store your walking out of. Christmas is giving your time to donate to the local shelter whether it’s blankets, money or service. How about giving blood to the American Red Cross (they have great cookies). Since the time of Christ’s birth, the spirit of giving gifts has been present in the mind of each Christian as he or she commemorates the Christmas season. Our Heavenly Father gave us his son, Jesus Christ. This precious son gave us his life, the atonement and victory over the grave. What will you and I give for Christmas this year? Let us in our lives give to our Lord and Savior the gift of gratitude by living his teachings and following in his footsteps. It was said of him that he “went around doing good” (Acts 10:38). As we do likewise, the Christmas spirit will be ours. 

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Pondering My Blessings
Posted: December 15, 2015 - 9:15 am

In my first year or two in the business (early 80’s) a young couple wanting to buy their first home walked into our office looking for an agent to help them. That was my floor time day, so I was happy to talk with them. They looked and seemed young – and they were – not even twenty yet. They were expecting their first baby and were such a nice young couple. The young man was such an earnest guy wanting to find a home for his wife and soon to be 1st child. We talked for sometime and it was clear to me they couldn’t afford much. Our normal sale at that time was between $40,000 and $60,000 and I knew they were not going to be able to afford anything in our local market. They loved the area but it just wasn’t possible by a long shot. But I didn’t want to burst their bubble at that point because maybe they had some folks that could help them out. I set the young couple up with a lender to get qualified and suggested that they call me once they knew what their budget was going to be. 

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Reputation
Posted: December 11, 2015 - 9:38 am

You’re reputation is only as good as the WORST thing you’ve ever done. Yes, let me repeat that…You’re reputation is only as good as the WORST thing you’ve ever done. This is true in all aspects of life. In the real estate business, your reputation is everything. It provides you a platform for maintaining and growing your business. It is what separates you from everyone else and allows you to shine above the crowd. It takes years to develop your reputation. Hours and hours of putting yourself out there and letting the world see how you can add value to their real estate experience. You have zero control over what people say about you, so it is of the utmost importance that you do everything possible to ensure that everyone who comes into your world, views you in a very positive light. We as Realtors are also viewed by the quality of service provided by the people we refer to our clients too. In reality, it is generally only the referrals who don’t provide superior service that we are remembered by. We have all made mistakes and of course we learn from them, but it is how we respond to those mistakes that leave the most important impression. If we make a mistake and don’t deal with it head on, it will be the thing that we are remembered for. This last year, the headlines have been filled with stories about some very significant situations that relate to some very horrible things that may or may not have been done by public figures. The people involved had spent their careers building a strong reputation of achievement and success. Some of the reputations that are being soiled are of people who were not directly involved in the accused acts. They are being judged for their inaction in reporting the deeds committed by others. Although, in some cases, no one remembered the worst elements of the current claims. No matter what you’re faced with in your business, place of work, church, school, sporting event, family function, etc. ALWAYS DO THE RIGHT THING and your reputation will take care of itself.

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‘Tis The Season For Serious Buyers
Posted: December 03, 2015 - 10:22 am

This week I was on a listing appointment and the client asked, “Should I wait until after the holidays to list my home?” I have also had some sellers in the past call and say “no more showings until after the holidays.” The holidays could be the best time of the year to have your home on the market! People who look for homes this time of the year are SERIOUS BUYERS and not just out there to wear down your carpets. Who else would take their time to come look at a home in this hectic time of year, A SERIOUS BUYER OF COURSE. And…what better time to let them see your home beautifully decorated for the holidays. Buyers are more emotional during the holidays and your cozy warm home can cause emotions in a buyer you can’t get other time of the year. Serious buyers also have fewer homes to choose from during the holiday season, which means less competition for you and possibly a higher offering price. Starting in January there will be more homes coming to the market every day. Keep in mind the increased supply heading into the spring market without an equal increase in demand can cause prices to take a dip again. Buyers have more time to look for a home with time off work during the holidays and winter vacation breaks. People stay home more in colder weather and online searches go way up. Traditionally many people have job transfers at the end of the year and they need to find new homes and won’t be able to wait until spring to buy. Some people want to buy before the end of the year for tax reasons. If you are planning to purchase another home, by selling now you could be a non-contingent buyer in the spring when many more homes are available for possibly less money. Maybe you will be able to enjoy the rest of the season knowing you sold your house because you didn’t put off showing your home during the more hectic time of the year!

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Thanksgiving Day
Posted: November 24, 2015 - 1:06 pm

On October 3, 1789 President George Washington made a proclamation of a national day of Thanksgiving. I won’t quote his declaration in its entirety but this is what I felt was important to share as well as a little about the context for this declaration. “Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly implore His protection and favor; and whereas both houses of congress have by their joint committee requested me to recommend to the people of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness. Now therefore, I do recommend and assign Thursday, the twenty-sixth day of November next, to be devoted by the People of these United States to the service of that great and glorious Being, who is the beneficial author of all the good that was, that is, or that will be; that we may then in rendering unto Him our sincere and humble thanks for His kind care and protection, for the peaceable and rational manner in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One and now lately instituted, for the civil and religious liberty with which we are blessed…..”

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Kids on Showings?
Posted: November 24, 2015 - 12:59 pm

Should kids come along to look at houses? I get asked this question a lot. My answer to this question has always been “No”. However, I do let the buyers know what the process is going to be like and how it’s so much harder with kids. First point is, kids, no matter what age, usually only last about 2 to 3 houses. If you have 5, 6, or 10 houses to see that day, do you really think you can concentrate if you have to constantly listen to kids ask, “Are we done yet?” Second point is, no matter how “well behaved” your child is, they’re never well behaved enough to not run around a vacant house or not touch something in an occupied house. Kids just don’t really see those boundaries, and if the sellers are home, any child not their own is never well behaved. Third point, as someone who might be spending tens of thousand of dollars on one of these houses your not able to focus on the houses and really give them the attention they deserve because you’re worrying about which way your kid(s) ran and if they’re inside or outside, or if they’re upstairs or downstairs. Buying a house is a very emotional thing for most buyers, and it’s best to have focus. Kids can be a major distraction. With that, what do you do with the kids?

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Attracting Buyers’ Agents
Posted: November 24, 2015 - 12:51 pm

When your home is for sale, it becomes more than your home. It’s a commodity that has to compete with other homes in the complex real estate marketplace. How can you make your home it’s most competitive? Well, you do the obvious to make buyers want it-have it looking great, no bad kitty litter boxes, and a reasonable price tag. But you also have to make it competitive from the vantage point of the buyers’ agents, or the buyers who would love the place may never see it. You want to make your home the one every agent with a buyer in your price range wants to show. You want agents, not only to show it, but to want your house to be the one their clients choose. How do you do this? 1. Make your home easy to show. If you only let people in on Wednesday at noon when the moon is full, that doesn’t work for agents, even if they have buyers for your home. 2. Take Fang the leg humping Great Dane away from the property during showings. 3. Don’t stick around during showings to make sure the buyer’s agent doesn’t miss something. 4. Have your agent show you the marketing photos that will go into the MLS. The buyer agents will often select the homes they show based on these, so make sure the photos look great and that the description is a combination of enticing and accurate. 5. List with an agent that plays well with others-avoid agents who have nothing nice to say about their colleagues. Chances are the feelings are mutual. You don’t want other agents avoiding your house because your agent is a pill. 6. The commission rate or brokerage fee is very important in today’s market. If your agent is charging you a greatly reduced fee, this will most likely affect the coop fee, which is the portion of the commission offered to buyer agents in the MLS. The coop fee should be fair enough to motivate agents to want to sell your home. If you want to sell you home for top dollar in a reasonable amount of time, it’s important to maximize its exposure to the marketplace. This means appealing to buyers and the agents who are advising them on which homes to look at.

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Pennies on the Dollar
Posted: November 05, 2015 - 9:27 am

There have been so many myths throughout the years:  There’s a pot of gold at the end of the rainbow, there’s a fountain of youth in Florida, an apple a day keeps the doctor away, antivirus software is 100% effective.  Today’s current myth seems to be that you can buy homes for pennies on the dollar.  This past week, I had a buyer that wanted to offer 50% less than the current list price because the home was a “short sale”.  The buyer said, “we want to offer $50,000 CASH and we know that CASH will be accepted over buyers who need to finance.”  Okay, but the home is listed at $100,000, it is a short sale, there are already 6 contracts into the bank all at or OVER the list price and the bank has to approve the short sale.  Every week I educate potential buyers about the real estate market here in the south suburbs of Chicago.  Yes, there are a few REO’s, corporate owned, foreclosures and private sales out there that you might pick up for pennies on the dollar.  But, you need to look at the total cost and time of bringing that home up to livable condition because the homes that sell for “pennies on the dollar” are just that – total fix ups!!!

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Repair or “As-Is”?
Posted: October 29, 2015 - 2:37 pm

Last week, I listed a home that looked terrific, but the central air had come to the end of its functional life. Oh it powered on with its loud grinding motor, but it’s cooling days were obviously over. I called out two of the area’s HVAC experts to take a look. I received two competing bids to replace the central air compressor. The contractor bids where enough money to make the seller think about not replacing the unit and just selling the home with the AC “as-is”, with a disclosure that the unit was dubious. Now, that is option one. Doing the work and replacing the AC unit will cost the seller about $2,800. But my concern was that buyers, once they realized they would have to repair or replace the unit, would deduct a lot more than that from their offer. Over the years, I’ve noticed that most buyers over-estimate what it will cost to fix anything that needs to be repaired or replaced in a home that they are considering buying. I will often use the example of the bedroom doorknob that put a hole in the drywall. The seller knows that to repair the wall will take $10 in material and an hour on a Saturday and that hole is history. But, when the buyer sees that hole “it’s a $500 hole”.

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You Don’t Know Jack!
Posted: October 19, 2015 - 3:07 pm

You don’t know Jack and you probably don’t know Jill either Mr. Know-it-all.  I have been in this business long enough to meet my share of them, the uncle’s sister’s husband’s son who is the not-so-silent partner in my business relationship with my buyer or seller.  This person is offering advice of the worst kind.  I have no choice but to play it cool because my client greatly respects this advisor who’s never bought or sold a doghouse before, bought and sold when people “shook on it” or bought and sold when it was the exact opposite type of market my client is currently buying or selling in.

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Punching Bag
Posted: October 06, 2015 - 9:24 am

I recently had a conversation with an old acquaintance who is trying to sell her home in another state. I was shocked when she told me that her agent had cancelled the listing agreement via email and he wouldn’t take her calls. When I delved a little further I was no longer shocked; I found myself mentally applauding the other agent. My friend said, “I am under so much stress and that little #%(^)! didn’t seem to understand that having the house shown was just too much for me. I told him &#(!)# and @#*%)) and he hung the phone up on me! Then he sent me an email canceling the listing! Can you believe it? What kind of a #*&^(!)) would cancel a listing over a conversation? It wasn’t personal. He should have understood how stressed I am and dealt with it. Dealing with me is part of his job.” 

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