Although not a significant increase, there is some uncertainty as to the overall future of interest rates. Many expect the Federal Reserve to raise short term lending rates which would eventually raise mortgage rates- although the fallout of Hurricane Katrina could alter their plans.

So what does that mean to St. Louis? The Post Dispatch reported this week that St Louis area housing prices had risen 9.2% over the past year. That’s one of the largest one year increases St. Louis has had in the past 20 years- and that’s because of the record low interest rates that have kept home sales brisk. (Read the full Post-Dispatch article here.)

So, should we be worried about a real estate crash caused by increasing interest rates? Never say never. However below are a few factors that I think will affect the St. Louis real estate market more than a quarter point interest rate hike.

1) Hurricane Katrina (and any additional damage inflicted by future 2005 Hurricanes like Rita). As discussed in a previous blog entry, the fallout from Hurricane Katrina could eventually be felt in St Louis in the form of shortages for construction material. Shortages for cement, drywall, and lumber would in turn cause less new construction homes to be built which should in turn keep upward pressure on housing prices.

2) The Local Job Market. This week St. Louis took a big hit with the loss of some 1,700 local jobs thanks to the Federated buyout of local icon May Department Stores. The question to ask is, “How will St. Louis offset these job losses?” Can the growth from fast growing locals like Express Scripts, Build-a-Bear, Panera Bread, Enterprise Rent-a-Car, and others absorb those lost jobs? Can our nice slow economic growth entice corporations to relocate TO St. Louis- like Hardee’s and Arch Coal have in recent years? More important, will displaced May employees and executives leave St. Louis for good, or will we see start-ups and spin-offs blossom as a result? Unemployment and population shifts mean more to a local economy than interest rates.

3) Outside Investors. One of the more interesting trends we are personally seeing is an influx of out-of-state real estate investors who have been pushed out of the California and East Coast markets by astronomical real estate prices. Couple that with the talk of the “bubble bust” and there’s good reason for an investor to pull out of high priced (over priced?) coastal real estate and look toward safer Midwestern markets. One only needs to look as far as the Washington Street Loft District where 40% of the buyers are out-of-towners relocating or investing in St Louis. If this continues, it too will continue to keep an upward pressure on local real estate prices.

Realty Times reported this week that Hurricane Katrina will likely cause a slow down in the near-term economy while causing new housing costs to rise by 3-5%. This is based on a Freddie Mac report from earlier in the week. However most real estate experts tend to be in agreement that the worst of this storm, for those of us not living in the Southeast, won’t be felt for months to come.

News sources from all over the country- from Pennsylvania to Arizona, from Baltimore even all the way to Hawaii- are warning of the impact Katrina will have on the local construction trade.

Although Hurricane’s have historically caused short term price increases of construction materials (as demand outstrips supply), Katrina packed a double punch by not only damaging and destroying a lot of wood-built structures across the whole of the southeast, but the flooding in New Orleans, a major U.S. city, will cause immediate demand for building materials as homeowners replace flooded out drywall, plywood flooring, even carpeting to homes that otherwise weren’t damaged by the hurricane (or totally destroyed by the flooding). Combine this with the damage done to U.S. oil production as well as the Mississippi lumber industry, and picture begins to look bleak.

So what does this mean to the St. Louis real estate industry?

As a home buyer looking to buy a new construction home, expect those home prices to slowly start inching higher as builders start to estimate for higher construction costs. If you’ve been thinking about making a purchase, you might want to evaluate locking into a price now before builders start to get a grasp of their true costs. How high new home prices will climb will ultimately be determined by several factors:

- Where fuel prices ultimately settle. Although important, the cost of running a bulldozer today or tomorrow is less important to the overall cost of building a home than the long term increase we are apt to see in construction materials caused by increased shipping costs.
- If demand for building materials cause shortages. The profitability for a home builder can be quickly drained by construction delays. A shortage of key supplies, such as drywall, plywood, or 2x4’s, can cause a ripple effect with subcontractors- turning a two week delay into several months. More important, a delay of even a few weeks can cause a builder to loose thousands of dollars in financing and labor costs- costs that ultimately have to be passed on to future home buyers.
- What impact, if any, Katrina has on the local labor pool. Some experts are already predicting that the pending construction boom to rebuild cities like New Orleans and Gulfport will entice skilled construction laborers from around the country to relocate to the Southeast in search of higher wages. It is unknown if it will ultimately cause a shortage of skilled labor in markets like St. Louis, or force employers to pay higher wages to keep their people.
- Interest Rates are the other factor. A decline in interest rates, which has been predicted by some, could always offset some of these other costs for a builder. Increase in rates could only exacerbate the situation.

Looking Forward…

If you have a new construction home already under contract that is less than ½ finished, forget what your builder has previously told you and expect delays. It’s inevitable. If a builder can’t get access to building materials, then they can’t keep a home on schedule- and all signs point to eventual material shortages over the upcoming months.

How this will ultimately affect existing home sales remains to be seen. Long term building supply shortages could create a temporary shortage of new construction homes, forcing more buyers into existing homes (increasing existing home prices). However higher construction costs could also damper the rehab business- making it harder to sell some existing homes and driving some first time buyers, who tend to want updated or new homes, out of the market.

The impact higher fuel prices will have on the economy also remains to be seen. Could we see a slowdown of people upgrading homes? Will people want to be closer to work- slowing down sales on the edge of town and increasing sales closer in? Will higher heating fuel costs cause consumers to seek out energy saving devices that change the way we build homes- such as implementing solar or other technologies?

Worst Case Scenarios…

Although not likely, a sudden spike in material prices combined with long term shortages could push some builders with lots of pre-sold homes into bankruptcy as profit margins erode away. The industry’s worst enemy, however, would have to be long-term price/supply uncertainty. Uncertainty is what keeps the smaller builders and rehabbers on the sidelines. Not being able to accurately project costs also tends to force larger builders to be conservative and take on fewer projects. A local decline in housing starts by just 5% could be detrimental to a local economy- regardless of what is happening on a national scale. A building boom in the Southeast doesn't translate into a booming economy everywhere else.

Again, these are the doom and gloom projections that we don’t need to worry about just yet. However it’s going to be interesting to see just what happens to prices and availability down at the local Home Depot and Lowe’s.

Referenced to write this article:
http://realtytimes.com/rtcpages/20050909_rates.htm
http://www.thehawaiichannel.com/news/4942515/detail.html
http://www.eastvalleytribune.com/index.php?sty=47773
http://www.wnep.com/Global/story.asp?S=3779764

The reason we were forced to stop blogging a few months back has everything to do with how we started blogging in the first place.

Kimberly's original website sucked.

Yep, if you don't believe me, you can see the original beta version of it here.

Last December I took a few days off from work and set out to build Kimberly a new website. At the time her original website was only getting 3-4 visitors per day, so it really wasn't a large part of her marketing plan or budget. As such, a business decision was made to build the website as cheaply as possible. That's why I choose an Open Source (i.e. free) blogging application.

The original problem was convincing Kimberly to even blog at all. Her argument was that it seemed like a lot of work for a website that averaged 3-4 people a day. At the same time, nobody else was doing it yet (I'm 95% positive we were the first real estate blog in St Louis).

However I won out. Three days after Christmas, Kimberly posted her first blog- a home holiday safety tip. The free blogging software seemed ideal.

THAT WAS THEN...
Within a few months the marketing and website development that I was doing over the weekends became a full time job as Kimberly quickly evolved from a solo act to managing a team of agents- thanks in large part to this website and blog.

By May our website had a Google Page Ranking of 5. (FYI, that’s pretty good for a local site dedicated to real estate).

By June we were pushing 1000 visitors to our site a day.

Unfortunately all of the corners I cut six months earlier to build this website as cheaply as possible had come back to bite me in the rear- and nothing was more frustrating than the free blogging software.

As blogging software quickly matured to offer new features like RSS/Syndication, Pictures, Audio/Video Attachments, Podcasting/Blogcasting, etc., our free blog software was left in the dust. So a decision was made to move the blog to a new software platform. Since I wasn't 100% sure I could migrate our old posts (which were able to do), we decided to stop posting until the new software was up and running.

THAT BRINGS US TO TODAY….
There have been a lot of delays at getting to this point, but we’re finally here. I will discuss some of the great things that have happened to us since June in later posts. But looking forward, this new blog software gives us the ability to:

- Have multiple Blog “Channels" for different topics. One of our biggest challenges was trying to keep the blog on the topic of real estate (when there was something more interesting on our mind to write about that day like a local news story or event). If you’re someone who reads blogs from time to time, you know how frustrating it can be when the blog author you found so compelling the day before is droning on about how cute their cat is in their next posting. Moving forward, this will be the “Real Estate Blog Channel” and a second “St Louis Living Blog Channel" will be created to talk about local events, local dining, etc. Additional Blog Channels will follow in the future.

- Pictures, Graphics, Hyperlinks, etc. It just makes it a more attractive looking site. It also allows us to post photos of homes and real estate developments we visit as well as activities and events that we participate in.

- Video/Audio files. One of the exciting things about podcasting/blogcasting is the ability to syndicate audio/video files around the internet to lots of people. A few months ago we began offering internet video home tours to our listing clients. Moving forward blog syndication will allow us to get more exposure for our client's home listings. We also have some other exciting video projects in the works.

For the time being, let’s just say it’s good to be back. Kimberly and I are looking forward to resuming our old blogging ways.

Thanks
Darin “Sid” Cameron

If you look on the right blue side bar of the website and scroll down, you will see an ad with a yellow sign that says, "Top Rated School Reports FREE". Click on it. There is NO sign up required to use this service, and it's mostly free of advertising.

This service will give you all kinds of reports and information on both public and private school districts and buildings throughout the entire USA (not just St Louis).

With this service you can find out buildings results on standardized test scores, student to teacher ratios, read parent reviews, etc. More important, you can compare school buildings to each other. If you are thinking about moving and the quality of a school is important to you, this service should be a nice tool to use.

Let us know what you think of this service. Is it useful to you? Have you seen something better somewhere else? Since we're paying a yearly fee to have this service on our website, it's useful to know if it's a benefit or not.

Just an update from your friendly neighborhood webmaster.

Thanks
Sid

For more information, read the AP article on STLtoday.com here:

http://www.stltoday.com/stltoday/realestate/stories.nsf
/story/0B0359CEF9D33B858625701C00014DBE?OpenDocument

On the Web:
Freddie Mac: http://www.freddiemac.com

http://www.stltoday.com/stltoday/realestate/columnists.nsf/
dianhymer/story/032F9E312021A6E086257019003ABFB5?OpenDocument

Although I got a few laughs out of it, I hesitate to use the word "funny" to describe the article because I have a few of these stories of my own (unfortunately).

Yes, real estate can be an ugly business, and as I read Dian's article I couldn't help but to wonder if every example she used happened to be her own! Since I've written several blogs talking about the extensive steps sellers need to take to get their home sold, I think it's high time to turn the table on the buyers and their agents.

When the article mentioned the seller who was upset at people walking around her backyard without permission (which I�ve had happen myself), I couldn�t help but to think about one thing. TRESPASSING! Just because there is a for sale sign in the yard doesn�t mean its open game to poke around. That home is still private property, and your appointment is your invitation to walk around (even if it�s a FSBO, new construction, whatever). Without that invitation, those people in the back yard were technically breaking the law.

And before you try to rationalize the behavior, think about the buyer. You know NOTHING about them. There is the distinct possibility that the seller is crazy or at that moment drunk or on drugs. I know that sounds funny, but I�ve met some pretty strange people over the years and you never know when the seller could be a gun nut high on heroin. More important, what if the adults aren�t home; but their young children are? A stranger walking around the backyard unannounced is not only scary, but one call to the police from a frightened child could have you handcuffed in the back of squad car. The same goes for an elderly seller or even a single woman. What might be curiosity to you might be a safety or security issue to someone else.

Also, keep in mind that appointments aren�t required simply so a seller can clean up before you get there. There may be pets that need caged- pets that can bite or attack a stranger walking around in THEIR yard. In the case of new construction or a rehab project, there could be dangers that require you to be supervised to visit (and insurance companies can be quite inflexible on this point).

Unfortunately there is also bad behavior on the part of agents. Recently, I got a phone call at 8:00pm on a Friday night. It was an agent. She had printed out the listings she wanted to show her clients, but didn�t make appointments in advance. So there she was with her clients in her car parked in the driveway of one of my listings. Despite the fact that the listing clearly stated a two hour notice to show (which the client had requested), she was calling to see if she could just walk in (and was quite upset when I refused her entry after making her set in the driveway for 10 minutes while I attempted to call the seller to get permission). Although I harp to my sellers that they need to be flexible to the needs of potential buyers, at 8:00pm on a Friday night I had no way of knowing if my young single male client (whom I couldn�t reach) had his house ready to show.

Most buyers are willing to bend over backwards to get their home sold. But please, don�t make assumptions- because they could be wrong!

http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/05/27/BUGLHCVL1K1.DTL
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/06/03/BUGF9D2MK51.DTL

However I�m not writing this article to discredit Mr. Lazarus. Indeed, I believe security is a serious issue to be considered when selling your home. I�m just disappointed because a seasoned reporter from a large, well respected newspaper could have written a great article interviewing safety experts and discussion SOLUTIONS a seller could take to safeguard themselves from such a crime (i.e. doing his readers a service). Instead the reporter took the cheap route to sensationalism by playing upon the FUD factor (Fear, Uncertainty and Doubt).

The reason this is an issue at all is because of one key fact: If people don�t see your home, odds are in favor they won�t buy it. There really isn�t a way around this fact because very few buyers buy homes sight unseen (generally those that do are looking to bulldoze your home as soon as you are gone!). For that reason, when you want to sell your home you really have no choice but to open it up to people you don�t know. Like it or not, when you open your home up to prospective home buyers you also open it up to the public at large who may be pretending to be a home buyer so they can be nosey, curious, or worse.

The solution to this problem is to just use a whole lot of common sense. In my mind, the mark of a good agent is someone who will walk through the home with the client and discuss how to �stage� the home well before the home is ever listed. (I discussed this topic in February, see: �Your Basement Smells Like Urine Part III� at http://www.stlagent.com/blog/00000038.html).

You see, the stuff people want to steal generally brings with it a second problem- it�s distracting. The average buyer only spends a few minutes in a home before they head out to the next one. That�s why you want your prospective buyers looking at the home and the home�s unique selling features- not the stuff in it.

A good recommendation is to pre-pack anything that is distracting, eye catching, breakable, or valuable- leaving nothing out in the open that you wouldn�t let a group of small children or pack of dingoes be around. I personally recommend PODS- Portable On-Demand Storage- because the POD gets dropped off and gives you the seller time to pack the stuff on your own time table. Plus, the POS can be delivered weeks or months later to the new home whenever it�s convenient to be unpacked (unlike a traditional move where the stuff is setting around in nice, easy to cart off boxes waiting for a truck to arrive on moving day). It also allows you to clear out clutter or excessive furniture that may make your house look small.

There are also solutions to securing valuables in a home that can�t be packed up (watches, jewelry, money, etc). There are companies that make shaving cream cans, books, Coke cans, etc that are really decoy safes (see: http://www.safetycentral.com/cansafes.html or do a Google search on �decoy can safes�. Just make sure the safe you are buying is appropriate for the room you are hiding it in (i.e. no shaving cream in the kitchen). Another more traditional solution would be bank safe deposit boxes or just flat out hauling stuff to a trusted neighbor or family member�s home until the house is sold. The key is, if someone is taking the trouble to case your home and they don�t see anything worth while to steal, your chances they will come back are greatly diminished.

Realize also that the Average Joe who gets a case of sticky fingers when they see that $20 setting out on your nightstand is as big of a threat to worry about as the professional thief. When you list your home for sale you start your life in a �fishbowl.� That means taking a few minutes every morning to secure things prior to leaving the house just in case you have a showing that day. Again, what they can�t see, they can�t take.

The next step is securing the home. If you are about to sell your home, odds are in favor that your future buyer�s building inspection will catch the broken door locks and windows that don�t latch and make you fix them (or pay to have them fixed) prior to closing. So why not take the time to fix them prior to selling so they don�t tempt a potential burglar looking for an easy target? This should also help protect you from the amateur thieves that may lurk in your own neighborhood. Also look for simple, cheap solutions that might provide a little extra protection- like a brace to lock a sliding glass door from being forced open. If you have a lot of computer or electronic equipment, there are locks and chains that tether your equipment to the furniture that are relatively inexpensive (see: http://www.kensington.com/ ).

Another thing to remember is when selling your home you often have your daily routine broken up- and that makes you vulnerable. It�s a lot like being on vacation. If your home is going to be setting empty while you are out of town looking for a new place to live, have a trusted friend or neighbor periodically check up on it. Also make sure the lawn gets mowed and stop mail and newspaper delivery. Nothing says, �No one�s home,� quite like two weeks worth of newspapers strewn across an unmowed lawn. You can also get timers for internal lights pretty inexpensive now.

Prior to moving is a great time to set down with your insurance agent and discuss homeowner�s insurance. If you are really worried about theft during the moving/selling process, then being properly insured during this time should help you sleep easier. Not all policies cover valuables if they leave the home either. Forget about theft for a second and ask yourself what happens if the moving truck is in a wreck or your in-laws garage burns down? Make sure your valuables are insured if they are in a moving truck, POD, storage shed, or someone else�s home. This may require a short term renter�s contract or other short term solution.

Moving time is also a great time to take inventory WITH A CAMERA! If you don�t own a camera, go buy a case of disposable ones. By taking photos or a video of your valuables prior to packing and moving, you have proof that an item wasn�t damaged before a mover touched it (should you have a problem later on). This will also help you identify missing items should your home actually be the one that gets broken into as well as provide proof to your insurance company so you can get reimbursed.

Lastly, when you start to prepare for the safety of your valuables, also consider the safety of you and your family. Personal effects can tell a stranger a lot about you- and your children. Those credit card and bank statements you have setting out on your desk could provide a goldmine to someone looking for an identity theft victim. Family photos hanging on the wall can tell strangers more about your family than you may feel comfortable having them know. I generally feel the less a buyer knows about a seller the better off the seller is.

Again, the goal here isn�t to make you afraid of selling your home- it�s to PREPARE you for it. Although the odds, based on the stats I�ve seen, are pretty low that theft would happen, preparing yourself properly will only reduce your chances.

So, how low are rates right now? Generally, the folks who monitor rates are saying they're around a point lower than last year at this time (which we all thought was pretty low). But as every interest rate article I've read over the past year always points out, rates are expected to eventually start climbing by the end of 2005 (and the "experts" can only be wrong for so long you know).

As such if you've been thinking about refinancing or getting a home loan, do yourself a favor and consider getting the ball rolling while the rates are low. If you are refinancing, you may also want to think about refinancing your credit card debt to a lower (and potentially tax deductible) interest rate. The same might also apply to your car payment as well. The key is getting someone who is knowledgeable and trustworthy to help you determine what solution is right for you. As hard as it may be to believe, a good lender will want to make you happy in the hopes that you will work with them again or give them a referral- so be honest and open with them to see what they recommend doing.

This brings me to the topic of internet lenders. There are a lot of place out there you can get a loan from on-line and I�m sure many of them are good. However, I personally (and this is just my opinion) don't see a huge difference between the programs internet and out-of-state lenders are giving in comparison to what the local lenders are offering. Truth is, rates tend to be higher on the coasts, where many of the internet companies are located, than here in the Midwest.

The one thing to realize when working with any lender is that it's easy for them to give you a low rate when there are high processing fees, or low processing fees when the rate is high- i.e. a lot of companies play a shell game with financing, so make sure to read the fine print and know all your costs. Also, I strongly encourage you to shop around. Talk to three lenders- it�s a nice number. If someone is offering �too good to be true� programs, get things in writing. My experience is that the guy who �guarantees� you a low rate before he�s even runs your credit score is more than likely trying to �reel you in� and will make up for the low rate with processing fees. (At this time I should also point out that I�ve seen clients who have hurt themselves by talking to too many lenders. Be careful about having your credit score pulled by dozens of lenders because it can get your credit score lowered).

But back to the local guys� I personally hate working with out-of-town lenders. Why? Because things go wrong- that�s life. Imagine showing up to a Friday home closing with movers lined up to move you that weekend only to find out documents that were suppose to be Fed Ex�ed by the out-of-town lender didn�t make it off their receptionist�s desk the night before. When that happens, you don�t have a home to move into until Monday. Period. (fyi, faxing or e-mailing isn�t an option with legal documents). With a local lender, emergency documents can be couriered the same day- or for that matter, you can drive over yourself and get them. As my husband says, �if things go wrong, it�s good to be able to drive across town and wrap your fingers around someone�s neck!�

So, if you want my recommendations, below are the three primary lenders I work with (in no particular order). All have their necks located here in the St Louis area. Feel free to give one or all of them a call to see what they can do for you.

Russ Miller
Infinity Mortgage Funding
Phone: 314-439-9999
russ@infinitymortgage.us

Michael Hanrahan
Plaza Mortgage
Cellular: 314-518-3086
Email: mhanrahan@plazamortgagegroup.com

Elena Sordo-King
Pulaski Bank
Phone: 314 878-3523 x3034
esordoking@pulaskibankstl.com

The Realty Times article can be found at:
http://realtytimes.com/rtcpages/20050527_hometechnology.htm

The Home Safety Council is at:
http://www.homesafetycouncil.org/index.aspx

Although the Inman article was full of stats and examples of what today�s home buyers are doing differently from buyers a few years ago, what the article didn't talk about is what the real estate agents are doing to actually make it easier for on-line buyers to find and evaluate homes.

One of the biggest problems in searching for a home on-line is actually finding the home listings you are looking for- and finding them before the home is actually sold! Most local websites only list a few homes and national sites like Realtor.com can take weeks to post new home listings.

This brings me to our website, www.stlagent.com. We�ve incorporated an MLS (stands for Multiple Listings Service) search option that lets you search the database real estate agents use. It includes virtually every home listing in the St. Louis, MO area regardless of agent or listing office. Unlike the national websites, our MLS feed is updated daily.

We also have an advanced search engine, called the Scouting Report, which gives you a secure, password protected website where you can set up search criteria specific to what you are looking for. The Scouting Report will then send you a daily e-mail of the new homes from the MLS that meet your criteria. If you see a home you like, you can log in and save it. That way if anything changes- the home sells, there is a price change, or even new photos are added- you will know immediately.

More important, we�ve spent a lot of time researching the internet looking for ways we can improve the home search process. As such, below is a press release for our Streaming Internet Video Home Tours. If you haven�t seen one of our videos yet, read on. Also, we have low bandwidth versions of our videos for those of you on dial up connections.

Local Agent Brings Internet Real Estate Video Tours to St. Louis
--------------------------------------------------------------------------------

For Immediate Release

CHESTERFIELD , Missouri �May 24, 2005�Kimberly Cameron, with Prudential Alliance REALTORS in Chesterfield, is now offering streaming internet video home tours on her website, www.stlagent.com. Cameron and her real estate team, The STL Agent Team, are the first real estate agents in St. Louis to offer on-line home tours as a standard listing feature.

�It�s something agents on the coasts started using a few years ago to help sell luxury homes,� said Cameron, �but we have yet to find anyone who is offering it as a standard service on all the properties they sell.�

The on-line videos are two to five minute tours of featured homes that are listed with Cameron and her real estate team. The videos, which are embedded in a standard web page, play using the Microsoft Windows Media Player which is available for both Windows and Macintosh computers. Because the videos are �streaming,� users don�t have to wait for the entire file to download before they begin to play.

�The internet has changed the way people are starting their search for a new home,� said Cameron. �Today, we�re finding that more people are starting their home searches on-line instead of with the local newspaper or open houses. Unfortunately the real estate industry has been slow to embrace the internet. It's not uncommon for local agents to still not even have a website; and the majority that have a website are just publish static information and photos that mimic a newspaper ads.�

�We believe the on-line video tours will give a prospective buyer a better sense of what the home and neighborhood is like,� Cameron continued. �This is especially important for out-of-town buyers who want to feel like they are there.�

To see samples of the on-line tours, please visit:

http://www.stlagent.com/video/7127glades_media.html
A video home tour of 7127 Glades Ave in Richmond Heights, MO.

http://www.stlagent.com/video/new_listings.html
A video home tour of five new and upcoming St Louis area home listings.

Thanks
Darin �Sid� Cameron
Director of Marketing
The STL Agent Team

Kimberly Cameron
Team Leader
The STL Agent Team

It includes information on:

A Charming Brick Home in Overland at: 9418 Theodosia Avenue right off of Woodson Drive near I-170.

A Condo in the highly sought after Brentwood Forest Community at: 1418 Thrush Place

A great two-story home located in the Sugar Creek Country Club neighborhood of High Ridge at: 119 Greenway Court

A ranch in Eureka that will be updated top to bottom by the time it lists at: 514 Forest Run Drive

A MUST SEE 100 Year Old Historic St. Louis West End Home within walking distance to the University City Delmar Loop at: 5933 West Cabanne Place

In April we listed a great little home in Richmond Heights that has had a LOT of updates at:
7127 Glades Avenue. Note: This home has it's own full internet video tour which you can find on it's listing.

Also, we just had a price reduction on a great home in Webster Groves at: 410 Lee Avenue. Note: The full internet video tour for this home is currently being remade, but it should be on-line within a few days.

Our internet video tours are one of the many marketing solutions our team offer to set ourselves apart from other agents. If you are thinking of selling your home, please contact us for a consultation on how we can market your home.

Thanks
Kimberly Cameron
314-267-2691

As I've been surfing the internet, I've seen several postings from agents who work for discount brokers claiming that they are being unfairly punished by "traditional" real estate brokerages who want nothing more than to keep real estate commissions high.

Here is my perspective...

I also believe that the biggest problem the real estate industry has isn't discount brokers who offer reduced services for reduced rates. In my opinion, the biggest problem the industry has is the mass horde of people masquerading as "full-service" agents that know little about the industry, provide less service than the discount brokers, and ruin the industry's reputation by over-promising and under-performing.

However as the concept of discount brokerages has caught on, there have been brokers that have popped up that basically removed ALL services from their portfolio. (Except for separating the seller from a transactional fee of course...) Generally the only service these new-age brokerages have been providing is to place the seller's home into the Multiple Listings Service (MLS) database that buyer's agents use to find homes. From there they let the seller handle the rest.

The problem with these "no service" brokerages has been two fold. First off, it places the burden of reviewing and negotiating contracts on the seller who usually has little to no experience in doing so. Second, this in turn increases the burden placed on the buyer's real estate agent who ultimately ends up working directly with both parties in the transaction.

Opponents of this legislation suggest that this all boils down to the buyer's real estate agent trying to do as little work as possible for their commission check. However, there really is more to it than that.

When a home buyer signs an agreement with a real estate agent to represent them, the agent is placed in a binding contract with the buyer to represent their best interest in the transaction. This is basically the same relationship you would have if you were working with an attorney or if you were a sports star signing with a sports agent.

When the agent is placed in a position where they are working with both the buyer and seller (a practice called "Dual Agency"), their ability to represent the best interest of only the one party becomes questionable. That's why buyers and sellers must sign a release form that basically waves their rights to representation before an agent can legally create a dual agency relationship.

But in the case of the "no service" brokerages, no dual agency contract can be signed since the seller does in fact have a representative (just one who isn't present during negotiations). Regardless of how the transaction actually develops, it opens up the buyer's agent to potential litigation should the buyer have second thoughts on the property after the sale.

Even worse, this scenario places the seller in a position where they may think they are being fairly represented by the buyer's agent even though they are not. This is particularly troublesome when the seller is elderly or has some sort of limited mental capacity.

It's easy to imagine the elderly widowed woman living on a fixed income giving the "nice agent" every home credit and price discount they ask for. Unfortunately, the "unscrupulous" agent in this scenario is simply performing their job as required by law.

And this is where politicians get involved...

There's an old saying that says, "There is no product or service on earth that some person can't strip value from in order to reduce its cost- and the person who only buys based on price is that person's victim." (Author Unknown)

That saying is pretty dead-on here. What we've seen is that at some point the presences of an agent doing nothing can cause more problems than having no agent involved at all. Heck, one has to question why a seller would pay some of these agencies when they could just try to sell the home as a For Sale By Owner (FSBO).

That's why the task the Missouri politicians have attempted to tackle with this bill is the question of, "What are the minimum responsibilities of a real estate broker or agent to justify them even being in the loop."

I don't believe this taxes or limits legitimate discount brokerages in any way. Reputable discount brokerages who deliver a service of some kind have nothing to worry about. The goal here is to simply keep unscrupulous brokers or agents from preying on unsuspecting homeowners who don't know better.

I applaud this bill.

Sid Cameron

Missouri: House Bill 174

"All exclusive brokerage agreements shall specify that the broker, through the broker or through one or more affiliated licensees, shall provide, at a minimum, the following services: Accepting delivery of and presenting to the client or customer offers and counteroffers to buy, sell, or lease the client's or customer's property or the property the client or customer seeks to purchase or lease; assisting the client or customer in developing, communicating, negotiating, and presenting offers, counteroffers, and notices that relate to the offers and the counteroffers until a lease or purchase agreement is signed and all contingencies are satisfied or waived; and answering the client's or customer's questions relating to the offers, counteroffers, notices, and contingencies. Nothing contained in this section shall prohibit the public from entering into written contracts with any broker which contain duties, obligations, or responsibilities which are in addition to those specified in this section."

As I've been surfing the internet, I've seen several postings from agents who work for discount brokers claiming that they are being unfairly punished by "traditional" real estate brokerages who want nothing more than to keep real estate commissions high.

As such, tomorrow I will give my perspective on the bill.

Thanks
Sid Cameron

History:
March 14 � House passed 156-0
May 5 � Senate passed 33-0

For a full version of the bill, go to:
http://www.house.state.mo.us/bills051/biltxt/truly/HB0174T.HTM