"You've Caught the NET!"

Good Evening, Folks!

Would like some input from those of you that lead a Team, as I do.  It can be a Team of Real Estate Agents, Unlicensed Assistants + Yourself, a Lending Team, a Staging Team, or a Husband & Wife Team in any of the above categories.

When times are tough, closings are hard, and revenue is tough to come by - what do you do to keep your Team motivated, postitive, and working through the slow times?

When is it time to perhaps let go of an under-performing Team member?

Do you help keep them financially solvent if they need extra money - or is this a bad precedent to set?

What types of training do you emphasize during slow times - highly motivational stuff?  Tech stuff?  The basics?  What?

I need to do a bit of Masterminding here, and I can think of no better place to do it!

We had a very strong production year in 2007 - but 2008 pales by comparison so far. 

As the leader of a four-Realtor + two admin Real Estate Team, I'm down a bit numbers-wise, but still getting by.  But my people seem a bit blue, and frustrated - and I don't want to lose them!  Or, perhaps, I need to consider cutting bait on those that are too "down" - I'm not sure!

Would love your thoughts, Team Captains.  Please share!

DEAN & DEAN'S TEAM CHICAGO

Happy New Week, Everyone!

Here's the latest Stat Summary on the Chicago Real Estate Market, based on data pulled yesterday evening, April 27, 2008 -

Active Listing Inventory continues to grow, slowly, while Units Pending Sale ("Just Sold") jumped last week.  Sold Units and Sales Volume were flat last week, and  Average Market Time gave up about half of its 22% gain from last week. 

Absorption Rate was roughly flat this week - with an average inventory turnover in the North and Northwest Side Chicago Areas we serve remaining just below 28.5 months.   Percentage of Sale Within Six Month (180 Days) also flat this week.

Communities and clients we serve reside, or plan to reside, in the Chicago Neighborhoods of The Chicago Loop, The Gold Coast, River North, Lincoln Park, Lakeview, Uptown, Edgewater, North Center, Lincoln Square, Albany Park, Ravenswood, Wicker Park, and Bucktown. 

Also, these Great Chicago Neighborhoods: Logan Square, Rogers Park , West Ridge, Portage Park, Jefferson Park, Norwood Park, Sauganash, Edgebrook, and Edison Park.   Plus All Chicago Suburbs. 

SINGLE FAMILY, CONDOS, AND SMALL MULTI-UNIT PROPERTIES - NORTH SIDE OF CHICAGO, NORTH OF ADDISON STREET, WEST OF ASHLAND AVENUE

                             ACTV LISTINGS        JUST SOLD         CLOSED        EXPIRED

Please visit and review our Chicago IL Real Estate Stats Pack Archive via our Team Blog Center - BlogChicagoHomes.com. 

Have any questions on any Chicago Neighborhood or Chicago Suburb?  Call or write and let us know!

DEAN & DEAN'S TEAM CHICAGO

Last February 5th, we commented on a trend of what many would consider"Redlining" of local real estate market areas by Countrywide Homes Loans.  Last January, Countrywide, and several other lenders and Private Mortgage Insurance Companies, have created their own "Soft Market Index" of zip codes or metro areas they consider "In Decline."  (Click here for our AR Post on that day).

Although the Chicago Metro Area ranked an attractive "2", on a 1 - 5 scale, with a "5" Zip Code or Market Area showing the greatest potential for decline, many other real estate markets - including those in hard-hit areas of California, Florida, and Nevada - have large portions of their states negatively labeled.

The end result, for many borrowers in these areas, is usually a last-minute demand by lenders for considerably more down payment at closing, additional fees, or, in some cases, higher interest rates for some borrowers.  The majority of borrowers, especially those with modest income and assets, have no funds to meet these late lender demands.

Seeing the potential to make a growing problem even worse, many consumer and industry trade groups are turning up the volume on their level of complaints.  The cry is especially loud in those groups representing minority constituencies.

Timothy Sandos, President and CEO of The National Association of Hispanic Real Estate Professionals, contends "declining market" labeling may penalize huge geographic areas, even though certain neighborhoods or suburbs within these markets may show stability.   Sandos would like to see greater weight on neighborhood-level evaluation by property appraisers.

The "Declining Market" tag, Sandos feels, could further depress neighborhood real estate prices, and scare off additional potential buyers.

Fannie Mae and Freddie Mac guidelines permit exceptions to their declining market scoring model.   However, many lenders, flush with thousands of new and likely mortgage delinquencies and home foreclosures, hesitate to make exceptions.  Spokesmen for Fannie and Freddie are "evaluating the fairness" of the market-scoring process, but have yet to make any mandates for change.

For more info, please review our post today at BlogChicagoHomes.com, and the included link to Kenneth R. Harney's article in today's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO

Kimball Hill Homes, based in the Chicago Suburb of Rolling Meadows IL, became the latest casualty of the sharp drop in new home sales nationally.  The company filed for Chapter 11 Bankruptcy Protection here in Chicago this past week.

President and Chief Executive Officer Ken Lovesays he has begun negotiations with possible investors, and hopes to have a restructuring plan in place within the next 90 days.  In the interim, Love says, his company will continue to "sell, build, and deliver homes without interruption."

The builder is currently marketing over a dozen communities in suburban Chicago, as well as in several other states.  It has recently pulled operations out of Florida, Wisconsin, and Ohiodue to unprofitably.

In one of their Chicago-area communities, Regency Oaks in the Chicago Suburb of Bartlett IL, our Team research indicates they are selling their remaining unbuilt homes and spec homes at a deep discount.  Nationally, the company has been hurt by a steep falloff in sales, and many cancelled contracts.  The builder contends they have lost $220 Million in the past year.

Please read our post via BlogChicagoHomes.com today for more info, as well as links to a Chicago Tribune Story yesterday by reporter Robert Manor.

DEAN & DEAN'S TEAM CHICAGO

The latest buzz among real estate investors - and real estate trainers - is Short Sales! 

Investors think they will find a new home for pennies on the dollar.  Distressed homeowners see a solution to their strangling house payments, and a house that now might be worth less than they owe on the mortgage.  It could be a win-win for lenders as well, as selling short generally results in a far lower financial loss than proceeding with foreclosure.

But, very often, short sales are easy to about, but far less successfully closed!  Some agents with short sale experience estimate that less than one in five tendered offers actually close.  A few find the success rate far worse.

Why the rare short sale closing?

In a conventional real estate transaction, only the buyer and seller need agree on price and terms.  These items are rarely renegotiated during the transaction, aside from issues involving property inspection.  Short sales, however, must also be approved by the lender, as well as the loan's investors.   Often,  they reject a potential buyer's offer - and after many weeks of review, consideration, and procedure.

Many times, potential buyers of a short sale property will lose patience in an approval process that can take upwards of two months to complete.   They move on, and walk away from the contract.  Or, they might not want to increase their original offer, which the lender has rejected.

As we all know, many home purchases made over the last few years involved not only one mortgage, but TWO - many borrowers took a large loan covering 80% of the purchase price, to avoid the hefty cost of private mortgage insurance.  They then took an immediate Second Mortgage, sometimes for the full balance of the purchase price - or sometimes slightly more - to make up the difference.

Most Second Mortgage lenders refuse the token pay-off sum offered by the First Mortgage holder in a short sale transaction - typically only $1,000.  They refuse to clear their lien, and the transaction stops dead.

A growing number of mortgage servicers, including Florida-based Ocwen Financial, prefer to create work-out agreements with the distressed borrowers, and will make every attempt at loan forbearance before agreeing to sell short.   Ocwen and others carefully scrutinize a short-sale applicant's complete asset portfolio, and will not approve a short sale if the borrower holds other assets that can be tapped to pay off their mortgage.

In a few situations, lenders refuse short sales because they don't appear to be "arms length" transactions.  Some distressed borrowers attempt to have relatives purchase the home short, and then grant it back, via Quit Claim Deed, to the original owners.

Our Team, here in the West Rogers Park Neighborhood of Chicago, sold a condo in potential short sale last summer.  The buyer cancelled the deal, after a ten-week wait, when the holder of the second mortgage on the property refused to release his lien - the first mortgage holder only offered a $2,000 partial payout to them.  The lender foreclosed on the condo.   It is now owned by the bank, and is listed by another real estate broker for $30,000 less than the offer the owner accepted last year!

Many short sale investors low-ball distressed properties, feeling the lender will consider virtually any offer on a mortgage-delinquent home.  Banks rarely accept these very low offers, however, and usually reject the bid - many weeks later.  The prospective buyer walks. 

To address the low-ball behavior, Fannie Mae is considering guidelines to provide a "floor price" on potential short-sale properties.   Lenders would communicate this bottom-line number to Realtors listing a potential short-sale home, to scare away unrealistic investors.

Short sales accounted for a very small percentage of real estate transactions when the market was strong, rates were low, appreciation potential high, and mortgage money plentiful.  But their numbers are growing in today's real estate market.  The National Association of Realtors estimates that 18% of sales in the last year sold short.

For more information, see our post on BlogChicagoHomes.com from yesterday afternoon.  It links back to a very comprehensive story by Ruth Simon and James R. Hagerty in the April 17th Edition of The Wall Street Journal.

DEAN & DEAN'S TEAM CHICAGO

THE CHICAGO IL REAL ESTATE MARKET, AND OTHER THINGS CHICAGO, FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!

In this early-2006 photo, I am but a passenger!  But, usually, I am the DRIVER!

However, with gas prices here in Chicago going through the roof (or, "through the WOOF," as we dogs say), it's getting tougher financially to cover my side job - cruisin' for chicks along Clark Street near Wrigley Field here on the North Side.

With the exception of certain cities in California, Chicago gas prices are among the highest in the nation.  Across the country, the average price of a gallon of regular gas increased to $3.53 this past week.  But here in the Chicago area, the average is nearly $3.75!

Here in the city, gas stations near our office in the Lincoln Square Neighborhoodoffer regular for nearly $3.95/gallon.  Premium is often over $4.20.  Diesel - take out a HELOC - it's now over $4.50 per gallon.  I saw a story on MSNBC the other night that many over-the-road truckers routinely fill the tanks of their 18-wheelers with over $1,000 in a single fill up!

That's more than I make as a dog in a whole year (we're working on a better contract through the Illinois Chapter of CRU - The Canine Realtors Union!)

You know, the other night, us dogs were talking after dinner, on the floor.  One of my close Beagle Buddies forwarded the idea that a sharp drop in gas prices may actually spur consumer confidence, and get them to buy big-ticket items, and perhaps homes, once again!   Such a fall, however, seems unlikely - while we dogs are alive, anyway!

An article in yesterday's Chicago Tribune quotes a fellow from suburban Lyons IL who this week paid over $57 - for just over a half a tank of premium gas!  A lady from Chicago combines her trips, and buys all of her gas in the suburbs, where she saves about 15-20 cents per gallon on each fill-up.  She also now walks to her local stores, about 7 blocks away, to save money.

There's another fellow in suburban Glenview who drives a taxi for a living.  His take-home income has fallen nearly 60% since gas prices started to rise early last year!  When visiting his mother in the Chicago suburb of Niles - he takes the bus!  (Indeed, ridership on Chicago-area public transportation has increased since gas prices started to rise - METRA Commuter Rail reports a 10% increase in ridership since early 2007!)

Finally, the increasing price of gas may be beginning to change American's driving habits.  Statistics from the Federal Highway Administration indicate total miles driven last year decreased 0.4% - the first such drop since 1979!  The same federal agency cites preliminary miles-driven declines of 3.9% last December, and another 1.6% drop in January, 2008.

Here in Chicago, though, most have to drive to work.  According to U.S. Census Bureau 2005 figures, only 11 percent of commuters in the Chicago Metro Area regularly use mass transit.  This figure is down from 13% eighteen years ago.  Across the country, only 4.6% of commuters ride the bus or the train. Most drivers - over 75% - drive to work alone!

Since the mid-1970's, here in Chicago, and elsewhere, many have moved to distant suburbs.  Workplaces and centers of commerce appear all over the Chicago area - not just in The Chicago Loop.  In most cases, public transit doesn't serve these local employment centers with any regularity.  And, often, car pooling is not workable, as workers travel to work from a variety of city and suburban homes to reach their jobs.

But the real tragedy is the percentage of us dogs who can afford to fill up the family car, and drive to do our important business.  It seems like forever since I've gotten behind the wheel of my Human Daddy Dean's Honda, to head out on the road. 

Be honest - how long has it been since you've seen a Little White Dog driving the family on the Open Highway?

Please check out my post yesterday on BlogChicagoHomes.com for more information, as well as a link and video in Rick Popely's story in yesterday's Chicago Tribune.

YOUR ACE REPORTER ON FOUR PAWS,

BUDDY HOLLY MOSS & DEAN'S TEAM CHICAGO

Often, when it comes to Hot Dogs here in Chicago - I'm the one most often referred to!   

However, my wife and our Team member, Sue Moss, offers these Hot Spots for the best Chicago-Style Hot Dogs, here in the city and the suburbs.

Before we begin, you have to understand the dos-and-dont's of Chicago Hot Dogs. 

First of all, true Chicago Dogs have a slightly-smoky taste, and medium-thick skin.  The best we've found are Vienna All-Beef Hot Dogs, manufactured right here near the corner of Damen and Clybourn, on the North Side of Chicago.  Vienna Hot Dogs are shipped, at great expense, all over the country, but they originate right here on the North Side!

Never call our dogs "franks"!  Or "weiners!"  Or anything else, OK?  They're simply HOT DOGS (Unless you're ordering a Jumbo Dog, or a Maxwell Street Polish Sausage - mmmmmm!)

Chicago-Style Hot Dogs come with loads and loads of the fixins - chopped onions, diced tomatoes, sport peppers, green peppers, lettuce, a pickle spear, mustard, and celery salt.  A few of the more adventuresome add sauerkraut to their dogs.  That's ok - but you probably won't get to spend the night with anybody after you eat a few Kraut Dogs for dinner - if you know what we mean!

Chilli on a dog?  You might get special dispensation if you come from Cincinnatti, but one-time only!

And - FOR GOSH SAKES - NEVER, NEVER, NEVER put ketchup on a Chicago-Style Hot Dog!  If you do, we're going to have to kill you.  Most likely, ketchup was invented so mothers can smear it all over every food they want their kids to eat.  So, unless your younger than seven years old - BAG THE KETCHUP ON YOUR DOG!  OK?  (You DO want to live, don't ya?)

According to Marcus Leshock of Metromix, here are his four highest-rated stands for the best Chicago-Style Hot Dogs -

The Weiners Circle  -  2622 N. Clark Street in the Lincoln Park Neighborhood of Chicago.  When asked, what's your secret, they simply responded that it's probably because their hot dogs are kept in their original casings.  Cost of Marcus' favorite hot dog -- $2.40.

Mustard's Last Stand - 1613 Central Street in Suburban Evanston.  Mustard's is steps from Ryan Field, the Football Home of the Northwestern Universtiy Wildcats.  It caters to many Northwestern students.  Cost of Marcus' favorite hot dog -- $2.49.

Hot Doug's is over at 3324 N. California Avenue near the Logan Square Neighborhood.  This establishment even has its own theme song.  Cost of Marcus' favorite hot dog -- $2.50.

Morrie O'Malley's at 3501 S. Union Avenue in the Bridgeport Neighborhood, near dreaded U.S Cellular Field on the South Side.  Morrie's has been in the business of selling hot dogs to White Sox fans for 19 years.  Cost of Marcus' favorite hot dog -- $2.00.

Here are three of my favorite hot dog spots, not rated by Marcus -

Gene & Jude's, 2720 River Road in Suburban River Grove.  This establishment has been around since the ‘50s with the same, simple menu consisting of hot dog, fresh cut fries and tamales.  That's it.  What a gold mine!

SuperDawg, located at 6363 N. Milwaukee Avenue in Chicago's Norwood Park Neighborhoood, has been at this same location since May, 1948.  Another gold mine, a bit pricier than the other spots mentioned, but well worth it.  You can't miss it, just look for the two ten-foot ceramic hot dogs, made famous in the movie Wayne's World in the 1980's,  on top of this vintage car-hop drive-in.  You'll find SuperDawg at the intersections of Milwaukee, Nagle and Devon Avenues.

Chubby's,  at 4652 N. Western Avenue in Chicago's Lincoln Square Neighborhood,  just steps away from the Dean's Team World Headquarters, down here in the basement, and across from the Western Avenue Brown Line L Station.  Great Vienna All-Beef Dogs - and special price promotions, too!  On promotional days, chow down on two Chicago Style Hot Dogs, complete with hot, fresh-cut fries - for only $2.99!

So come to visit us in Chicago - and don't forget to sample the Local Cuisine!

Check out our post via BlogChicagoHomes.com for more info on Chicago-Style Hot Dogs, and links to the Marcus' Metromix Review.

SUE MOSS & DEAN'S TEAM CHICAGO

New, far stricter underwriting requirements will hit condominium buyers with added force, as our Team, and one of our clients, recently found out here in Chicago.

One of our moderate-income clients, purchasing a smaller, inexpensive one-bedroom unit, had his application last-minute rejected due to the building being located in a "declining market" zip code, as defined by the Private Mortgage Insurance Company.  The PMI firm required a minimum 10% down payment from our client - he was scraping and saving to barely bring 5 percent!

Further, the building would not support a lower-down-payment FHA loan - it is a new conversion, with less than one-third of the units sold (FHA requires 90% sold in newer developments to qualify).

Our client will not be alone in his frustration!

Effective May 1st, AIG United Guarantee, a large U.S. Private Mortgage Insurance Company, will no longer offer PMI on loans for condos in "declining market areas," according to its own zip code list.  United Guaranty and other mortgage insurers will now require minimum 10% down on ALL condo purchases, and will not write PMI in properties less than 70% owner occupied.

These new PMI guidelines will affect all who put less than 20% down on their new condos, or refinance less than an 80% Loan-To-Value - regardless of the borrower's credit scores of financial history.

New, more stringent Fannie Mae guidelines require lenders to more closely review condo association documents and financials to assure adequate capitalization, and sufficient reserve funds for emergency repairs or other projects.  There are also new, stricter requirements concerning late-paid assessments, and the percentage of building space dedicated to commercial rather than residential use. 

Some lenders are making their own guidelines even tougher than the new ones from Fannie Mae, to assure compliance with the new rules.  Many potential condo borrowers in borderline buildings may be rejected.

One Connecticut lender, Jeff Lipes of Family Choice Mortgage, is concerned that even strong borrowers, with high FICO Credit Scores and strong down payments, may face loan denial due to the financial characteristcs of the condo building they are considering.

See our post today via BlogChicagoHomes.comfor more info, as well as a link to Kenneth R. Harney's article in last Sunday's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO

Monitoring Chicago Real Estate Sales and Prices?

You will see a drop in units sold here, year over year, between March, 2007 and March of this year, but it is not as severe as the State of Illinois figure.  Even comparing the City of Chicago against the larger Chicago Primary Metropolitan Statistical Area shows the city has had a smaller drop in units sold since Spring, 2007.

However, the Median Home Price - or the price at which half of the houses here sold above, half sold below - actually increased in the last year.  Further, Chicago Condo Buyers faced an even steeper median price increase going into Spring, 2008!

A few figures -

• Across the State of Illinois, 8,509 homes - single-family or condos - were sold in March, 2008, versus 12,075 in March, 2007.  The median price for a home in Illinois dropped to $194,500 last March, from $197,000 one year ago.
• The Chicago Primary Metropolitan Statistical Area (PMSA) tallied a 29% units-sold drop year to year.  5,753 homes or condos sold market-wide last March, compared to March, 2007 figures of 8,101 sales.  In the Chicago Metro Area, the median price actually increased 1.2% - from $245,000 in March, 2007, to $248,000 this year.
• In the City of Chicago, home and condo sales fell 11.5% between March, 2007 and March, 2008 - from 2,311 homes or condos sold one year ago, to 2,045 sold this March.  However, the Chicago Median Sales Price for homes and condos increased a rather-substantial 5.3% - to $300,000 now, from $285,000 in March of last year.
• Condo Sales in Chicago actually saw their Median Sales Price increase over 8%, to $317,900 this past March, according to sales data compiled by the Chicago Association of Realtors.

Across the country, the housing market slump continues!

Home and condo sales dropped nationally by 2%, to a seasonally-adjusted annual figure of 4.93 million sold units.  The National Median Sales Price dropped to $200,700 - 7.7% less than a year ago.

See our post today @ BlogChicagoHomes.com for more info, and a link to today's story in The Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO

Hi, folks!  Hope you're well!

Our Team members,Jeff Ardito and Kathleen Weaver-Zech, lost a listing the other day.  It was for a small, three-unit apartment building in the Chicago Neighborhood of Jefferson Park. 

The successful agent has made a living in the area by discounting his fees, signing for short listing terms, and taking the listing at whatever price the seller dictates.  His own Expiration Rate, predictably, is high.

How did this agent get the signature on the Listing Agreement?  Probably, by being agreeable - he likely figures he can now easily "work on his client's too-high price" now that he got the contract!  Not a long-term way of forging a valued client relationship, I would say - but very effective at generating a signature short-term, and perhaps a few bucks in his pocket if the listing, by chance sells.

But why didn't Jeff and Kathy get the listing? 

Most likely, they didn't crystallize MOTIVATION - the key to why the seller is selling in the first place!

Sure, they alluded to possible pricing levels.  Comparative marketing strategies.  Online promotion.  And we do all of that, in our humble opinion, better than just about anyone here in Chicago.

But if you don't focus on exactly what the client's MOTIVATION is, and custom-tailor your presentation to specifically WHAT THAT MOTIVATION IS, you simply have a signature with a Listing Expiration Date, and a listing unlikely to sell.

In order to precisely determine MOTIVATION, an expert Listing Agent not only has to ask a lot of questions, but also listen CAREFULLY for the answers, as well as the INTENT BEHIND THE ANSWERS!

This particular family wanted to sell because their building was too big.  They didn't want to deal with tenants anymore.  The building lies only about 75 feet from the busy Kennedy Expressway, I-90 here in Chicago. 

It sits landlocked with no garage, and the owner has to make separate arrangements with a neighbor to park his work truck off-street overnight. The schools are not good enough for their children.  Etc, etc.

If you properly uncover motivation, and gear your discussion specifically how ONLY YOU, and YOUR TEAM, can address and SATISFY THE MOTIVATION, the clients will work with you, and will pay a premium to do so.  If you don't uncover true motivation, you are just another real estate agent, hustling for the listing - so the seller might as well go with the cheapest, the one with the shortest commitment term, or the most agreeable!

"After all - all you folks are the same, right?"  That's the dreaded chant even very successful agents here every once in a while.  We top agents, however,blast through that homogeneity.  And we do so by identifying exactly what the client is after when they list -

THEIR MOTIVATION!

Of course, sometimes a potential client's "Motivation" is to go with the cheapest.  The easiest.  Success is irrelevant here - control is all important to some.

These are the times you have to look at your OWN motivation - and perhaps walk away!

Your thoughts here?

DEAN & DEAN'S TEAM CHICAGO