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Everybody knows a few things about real estate agents.
Obviously they
must love houses, and condos, and building sites. But there are other things we think we know, and which turn out to be urban --or suburban –myths. • “At the top of the list,” said Nikki, “agents are not cut-throat competitors. In almost every transaction, there’s an agent for the buyer, and one for the seller. We have a common goal, and nothing’s accomplished unless we synchronize our efforts. Sometimes we’ve worked together in the past, and thus have a history of filling in the potholes—and doing it quickly.” • More than a few people think agents can cherry-pick the best deals, grabbing up bargain properties as soon as they hit the listings. Or maybe even before. “This is more than a myth,” said Nikki. “It’s a violation of the agent’s license. Of course agents occasionally buy homes for their own use, but in these cases they’re obliged to observe some strict regulations. Such transactions don’t take place on the QT.” • Having signed a listing contract with an agent, what if the seller finds an acceptable buyer on his own? Would you say the seller has no obligation to the agent? “This problem rarely arises,” said Nikki. “But if asked to consider it, many people would say no. The agent didn’t do any work to earn a commission. But the agent’s contribution to the sale began long before the listing. It began as the agency built up the solid reputation and string of successful sales that first attracted this client. It continued as the seller used the agent’s time and expertise on marketing advice. In short, the contract signed by the seller does carry some obligation. • After getting a lot of help from a local agent, the buyers end up acquiring a house out of town. And using out-of town agents. “The myth here,” said Nikki, “is that although the buyers apologize profusely, they think there’s nothing else to be done. However, the agent should let them know that there’s a way they can help offset her already-devoted time and knowledge. That’s by making sure the out-of-town agents are advised they’ll be asked for a referral fee. At no cost to the clients.” Most real estate agents would love to see these myths debunked—as well as a few others. “But the upside, “ said Nikki, “is that this is a business where you build lasting relationships. There’s almost always time to correct false impressions.” ****** |
Thursday, July 31, 2014
Debunking myths about Real Estate agents
Tuesday, July 15, 2014
Is a "Flipped" House the same as a Rehab?
Congratulations! You’ve found the perfect home. And also discovered
it’s a “flipper.” Is this a problem?
“There’s a wide gulf,” said Nikki, “between flippers-- we call it the
F-word—and investors who take on the serious rehabilitation of a home
that needs repairs and upgrades to make it market-ready. Because
flippers are driven by time and cost containment, they usually
consider it too expensive to investigate a home’s hidden quirks and
flaws. For flippers, the changes are mostly cosmetic, and carried out
using the cheapest workmen and materials.”
Rehabbers are a different breed. They’re often established companies
with a reputation to uphold, and they take pride in their work. While
flippers will sacrifice the unique or historic features of a home, to
give it a vanilla, please-everyone look, rehabbers search out ways to
enhance these features.
Rehabbers may be individual investors or corporations, but when they
put a home on the market, they can supply interested buyers with
information about the work they completed. Often, that may include the
names of the contractors and inspectors used, their license numbers
and even work history, as well all permits when they were required.
To go back to our opening, what fears would a flipper generate? That
the owner hasn’t lived there? That the plumbing and septic systems
hold nasty but hidden secrets? That the flipper used cheap materials
that won’t survive a couple of winters?
“These are all legitimate questions, and a reliable agent will make
sure you get the answers,” said Nikki. “If the seller can’t come up
with a summary of the work he’s had done, the inspections, and
corrections recommended in those inspections, it's wise to probe
further.
"But if your queries are answered in detail, you know this house was
repaired and modernized by people who respect the property, who live
up to the full disclosure law, who offer warranties and make good on
them. Many wisely offer generous home warranties to help address any
unexpected surprises."
When investors of any stripe buy a home to resell, they know exactly
what price-tag it will carry when it goes back on the market. The
problem with a casually flipped house is that it may sound like a
bargain initially, but the buyer often ends up paying thousands more
to correct a hidden defect that the flipper never investigated. The
full disclosure clause applies only to flaws he knows about.
Rehabbers have generally taken the time to investigate the home's
systems and structure and have corrected defects they identify,
offering a more reliable choice for the new owner.
In appearance, flipped homes and rehabs all look great, sometimes
better than new. Only the paperwork will tell you if this is the home
of your dreams—or a potential nightmare.
it’s a “flipper.” Is this a problem?
“There’s a wide gulf,” said Nikki, “between flippers-- we call it the
F-word—and investors who take on the serious rehabilitation of a home
that needs repairs and upgrades to make it market-ready. Because
flippers are driven by time and cost containment, they usually
consider it too expensive to investigate a home’s hidden quirks and
flaws. For flippers, the changes are mostly cosmetic, and carried out
using the cheapest workmen and materials.”
Rehabbers are a different breed. They’re often established companies
with a reputation to uphold, and they take pride in their work. While
flippers will sacrifice the unique or historic features of a home, to
give it a vanilla, please-everyone look, rehabbers search out ways to
enhance these features.
Rehabbers may be individual investors or corporations, but when they
put a home on the market, they can supply interested buyers with
information about the work they completed. Often, that may include the
names of the contractors and inspectors used, their license numbers
and even work history, as well all permits when they were required.
To go back to our opening, what fears would a flipper generate? That
the owner hasn’t lived there? That the plumbing and septic systems
hold nasty but hidden secrets? That the flipper used cheap materials
that won’t survive a couple of winters?
“These are all legitimate questions, and a reliable agent will make
sure you get the answers,” said Nikki. “If the seller can’t come up
with a summary of the work he’s had done, the inspections, and
corrections recommended in those inspections, it's wise to probe
further.
"But if your queries are answered in detail, you know this house was
repaired and modernized by people who respect the property, who live
up to the full disclosure law, who offer warranties and make good on
them. Many wisely offer generous home warranties to help address any
unexpected surprises."
When investors of any stripe buy a home to resell, they know exactly
what price-tag it will carry when it goes back on the market. The
problem with a casually flipped house is that it may sound like a
bargain initially, but the buyer often ends up paying thousands more
to correct a hidden defect that the flipper never investigated. The
full disclosure clause applies only to flaws he knows about.
Rehabbers have generally taken the time to investigate the home's
systems and structure and have corrected defects they identify,
offering a more reliable choice for the new owner.
In appearance, flipped homes and rehabs all look great, sometimes
better than new. Only the paperwork will tell you if this is the home
of your dreams—or a potential nightmare.
Sunday, July 13, 2014
There’s a helping hand for reluctant sellers
“I know I have to sell, but I hate the whole idea!”
When a client interview opens like this, most real estate agents know they’re in for a certain amount of cheer-leading, hand-holding, and general bucking up. There are many reasons why sellers might dig in their heels at the thought of moving out. Some simply dislike change and disruption. Seniors and long-time home-owners say it feels like closing a chapter of family history.
One of the most common instances of seller reluctance crops up when the owner’s literally forced to down-size. We’re not talking here about empty-nesters envisioning a cute midtown cottage. We’re describing clients who are being driven into an independent
or assisted-living facility by declining health. Or seniors who can no longer manage the housekeeping and gardening chores their current home demands, but deplore the thought of living “un-surrounded” by their keepsakes, collectibles, and heirlooms.
“With most of my clients,” said Nikki, “I often check the Rolodex for all kinds of recommendations to get the property into marketable shape. Plumbers, electricians, landscapers, you name it. But I have to say that I’ve found only one resource to handle the complicated business of helping sellers cross the barrier when they’d rather not.”
“New Leaf Senior Transitions is a company that might have been invented by anguished offspring who don’t know how to ease their parents into simpler living. Or maybe by real estate agents who know how many small maneuvers it takes to scale a big house down to 900 square feet.”
Staci Zabell, owner of New Leaf, specializes in these small maneuvers. New Leaf helps sellers decide which possessions they can live without and then arranges for the sale or donation of the rejects.
They’ve developed a unique packing system that pares moving costs down to the bone. And best of all, their “check-your-new-floor-plan” innovation encourages distraught sellers to refocus on a future with possibilities.
“In the past,” said Nikki, “these complications and many others, were farmed out to specialists of varying competence. Though it’s not an agent’s job, we always got called in when things went wrong. The arrival on the scene of this comprehensive new service is a boon to reluctant sellers as well as to agents like me." You can find their website at newleafseniortransitions.com, or email Nikki at Nikki@GoldRushRE.com, for more info on New Leaf.
Friday, June 13, 2014
What’s Job One for a skillful agent?
As
most of our readers know, we’re continually running little polls among our
clients, readers, and friends. One of these ongoing quizzes
concerns the very foundation of a Real Estate agent’s work:
“What,” we ask, “is the most important task an agent can perform for
you?”
As
you may have guessed, the answers have surprised us. Most
commonly, the response from sellers is the research that leads to a reliable
market evaluation of the property in question.
And
as a rule, buyers too tend to emphasize the role of research. They want Nikki to
sift the market, rule out the “impossibles,” and show them through only the most
promising of affordable domiciles.
Among
past clients, both buyers and sellers, there’s sometimes mention
of secondary roles, which might include the aid a well-connected agent provides
in recommending helpful lenders and other professionals in the complex business
of transferring property. However, it’s the recurring clients--
the ones who’ve been through more than a few acquisitions and unloadings-- who
usually nail the answer we expected.
“Negotiating!”
smiled one of our clients. “Without your expertise, we’d have
jumped at an offer loaded with problems, or the one that threatened a serious
conflict. Once we’d have accepted unnecessary contingencies, wasted a bunch of
time, and ended up feeling like total Babes in the Woods!”
The
truth is that unless a buyer shows up with an all-cash offer and an elastic time
frame regarding the closing date, almost everything in the deal is
negotiable. When a home inspection unearths unforeseen pitfalls, a
veteran agent can sort them out handily. If a buyer or seller
backs out after tying up a property for a lengthy stretch, the agent’s
well-constructed contract usually offers some remedy. When loans
fall through, when appraisals come up short, or surveys reveal a boundary
conflict, a competent agent negotiates through the problem and helps reach a
solution that satisfies all parties.
Whenever
you find yourself ready to interview Real Estate agents, never hesitate to
explore their background in negotiating. Ask how they’ve dealt
with some of the pitfalls cited above. A true professional can
offer plenty of examples and probably enjoy remembering them.
“It’s
true,” said Nikki. “We may be good at research, and all the tasks that grease
the wheels toward smoothing out a successful sale. But if your
agent isn’t a top-notch negotiator, you’re not getting your money’s
worth.”
You
can reach Nikki at HolmesTeam@GoldRushGroup.net
Full disclosure is Real Estate’s “lemon law”
Ask
almost anyone how they feel about the “lemon law” in auto sales and you’re bound
to hear a resounding huzzah. To refresh your memory, this is
legislation that enables a car buyer to return a less-then-satisfactory auto
within a reasonable time frame and get a full refund.
There’s
a kind of lemon law in Real Estate, however, that doesn’t always have such an
easy fix. It’s known as full disclosure. “The state
of California extends very strong legal protection for buyers,” said
Nikki. “An alert agent is smart to counsel sellers to list
anything and everything that might affect the value of a property in a negative
way.” Sometimes this is a wrench for the seller. Who
wants to disparage a house that’s about to go on the market?
But
if full disclosure seems a boon to buyers (and it is), it’s equally so for
sellers. Much as it hurts to recite plumbing problems, leaky
windows, even upgrades done without a permit, such candid admissions give
prospective buyers a chance to decide if they want to take on these problems--
and often they do.
The
real snag arises if the buyer resells the property without fixing the problem
and then fails to disclose it. The original owner is off the hook,
but the second seller may be in for trouble. “In the worst case,”
said Nikki, “the new buyer may be very angry. But usually the
buyer’s and seller’s agents can get together and work out a
solution.”
Non-disclosing
sellers often deserve some sympathy. Sometimes they don’t know the
problem exists, or don’t recognize it as a hazard. The annals of
buyer discontent contain some surprising protests.
·
The
shower stall was not fitted with tempered glass
·
The
owner’s mother had died in the home less than three years ago
·
A
rattlesnake had been spotted in the back yard
·
A
neighbor was accustomed to burning his own garbage
·
The
dog down the street was a nonstop barker
·
Previous
owners had kept indoor cats
In
older neighborhoods, new owners may discover that unpermitted upgrades were
performed so long ago that local ordinances didn’t apply. As the
saying goes, these changes were “grandfathered” in. However, if
they haven’t caused trouble in all these years, they’re unlikely to be a problem
now, and can usually be brought up to code or “retro-permitted.”
“Happily,
there’s a limit to how far back these protests can reach,” said Nikki.
“The house you sold 10 years ago can’t come back to bite
you.”
*********
We welcome your comments and queries. Reach us at HolmesTeam@goldrushgroup.net
Seller’s remorse can spring from lack of planning
When
some home-owners latch onto the idea of selling the family homestead, the
whirlwind of necessary preparations can easily obscure the importance of
planning beyond the final closing. They’re swept away in a flurry
of small repairs indoors, pruning and planting outdoors, often organizing yard
sales.
“We
see this happen more often in an up-market,” said Nikki. “Owners
whose homes have long been ‘under water’ suddenly discover they can now sell out
and do better than break even. Sometimes far better.
An experienced agent will usually counsel that there’s no need to rush,
but others may cave in to fears of losing the contract.”
There
are more than a few reasons seemingly successful sellers turn remorseful, but
these usually stem from a lack of planning.
· Sellers
don’t know where they’ll live after closure. They haven’t
researched less expensive or smaller homes, and haven’t discussed renting vs.
owning again.
·
If
the sale is prompted by a job promotion or relocation out of the area, what once
sounded like great news suddenly seems a wrench. The sellers begin
to reevaluate the loss of friends, good neighbors, church, and other connections
they once took for granted.
·
Loss
of a job. Though the local real estate market is perking up, our
rise in business is too often based on down-sizing and automation.
The plight of seeking a mortgage on a new home without regular employment
is daunting.
· Offers
from buyers come in above the listed price. What’s the first
question you’d ask yourself in a case like this? Wouldn’t you
wonder if you should hold off selling and maybe net out more in a few
months? Maybe that experienced agent of yours was right in
advising you to slow down. This kind of seller’s remorse can be
remedied by withdrawing your home from the market, but you will owe your agent
due compensation for finding the buyers you asked for.
In
its mildest form, seller’s remorse is a sentiment probably shared by every owner
who ever turned over a latchkey. After all, you’re leaving a
citadel that will always encapsulate part of your life. But as you
now know, this syndrome can get costly if you fail to map out the next
stages.
“Always
scope out possible new digs,” said Nikki, “and decide whether you want to buy
again or rent. If you haven’t locked up a new home, we can
sometimes arrange for you to rent back your “ex-home” for a short time while you
sew up a new domicile. But this search works far better when you
run it in advance, and not out of desperation.”
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