August 29, 2007

Committing to One Buyer’s Agent

In my experience, buyers seem a little nervous about choosing only one agent to represent them in finding and purchasing a home.   Buyers often call and tell me that they are working with other agents but ask if I can help also.  They almost seem to think it should be flattering that they want my help but in these situations, it is only wise to step back and review the situation. 

One of the first questions an agent should ask a prospective buyer is, “Are you working with an agent already?”  If a buyer has already signed an agency agreement, then it would be unethical for me to work with that buyer.   I will not intentionally interfere with an established agency relationship.   Many agents have gotten themselves into unintentional trouble by working with buyers that have a signed agreement with another agent but the buyer failed to reveal that piece of information.   Also, in the state of Utah, it is required by law for an agent to have a written agency agreement for that agent to show other agent’s properties. 

Buyers may be reluctant to sign an agreement with one agent because they think that having several agents looking for properties will increase their chances of finding the right one.  I have even had buyers call me on one of my listings and after determining that this property is not for them, they will ask me, “Do you have other properties like this but with 4 bedrooms instead of 3?”   Understanding how an agent finds properties will help answer this question.  

I am a REALTOR®    which means I am a member of the National Association of REALTORs®  .  I am also a member of the Utah Association as well as the Utah County Association of REALTORs® .   Being a member of these great organizations gives me the right to be a member of the Multiple Listing Service (MLS).  The MLS is an online database of all properties listed in my area which is the state of Utah.  So, when a buyer asks me if I have other properties besides the one they are calling on, I can say, “Yes, I have absolutely thousands of listings.”   Having access to the MLS means I can find you any property,  with any criteria, anywhere in Utah.   Thinking that several agents looking for your “dream home” will increase your chances is a common mistake that buyers make because every REALTOR®   has the same access to the same database.  

If you really are concerned about finding the perfect home, then it would be best to choose one agent that is 100% committed to  you and has established a good enough relationship with you to understand what you are really looking for.  This can take a little time, since most buyers realize that what they thought they wanted in the beginning may not be exactly what they end up wanting in the end.   I have worked with many buyers in exclusive agency relationships where I have been able to help my buyers end up in a home that they absolutely loved but was not what they originally told me they wanted.  It look time, a listening ear, an observant eye, a building friendship, and my experience in this business for me to  see the subtle hints from their reactions to the homes we seeing and make the necessary changes in our search until we ultimately narrowed down the true definition of their “perfect home”. 

Maybe some buyers worry they will not be fairly represented by one agent.  It is important when hiring any professional that you do some homework before signing a contract with them.  No one automatically hires an Attorney or Doctor just because their name was listed first in the yellow pages.   Ask around, get referrals, do some research.  Interview agents and ask them how they handle situations that you have concerns about.   You don’t have to work with an agent just because his/her name was on the sign in front of a home you inquired about. 

So, while it seems to be a popular tendency as buyers to try and do as much of the home buying process alone and hold off as long as possible to have  professional representation,  it would be in your best interest to hire a professional early on.  Shorten search time, narrow down wants and needs more proficiently, avoid mistakes that could cost you legally and financially by having a professional’s experience on your side, 100% dedicated  to you and your interests.  At least that is some of the benefits my past buyer-clients have enjoyed by hiring me as their agent.   Read what my clients say about my service and professionalism in my section titled, “Letters from Clients”

Filed under: Blogroll,Buying,Personal — Susan @ 9:49 am




August 23, 2007

Designations

I am leaving this morning for Park City where I will finishing up the final step to earning my ABR designation.  I will be taking a class today and tomorrow which totals approx. 16 hours of instruction from Terry Watson.  I have heard nothing but good reports from his classes and am excited to hear what he has to teach me. 

I am also almost finished with all the requirements to earn my CRS.  It has been a long and interesting road and I am excited to finally be so close. 

Filed under: Blogroll,Buying,Personal,Real Estate — Susan @ 6:12 am




August 17, 2007

True Market Value and Saving The Commission

I recently talked to a couple that are trying to sell their home themselves.  This is about how the coversation went.

Seller:  ” We already bought a new home and have moved.  We paid more than we can afford for our new home, so now we need every penny we can get from the sale of this home.  We wont be able to pay an agent. 

Me:  “What price are you asking for this home?”

Seller:  “$XX, which I think might be a little high, but since we paid too much for our new home, we need the money.”

Me:  “How long have you had the home on the market?”

Seller:  “Too long!  We need to sell this fast because we can’t afford to keep paying for both homes.   We have had a few lookers, but nothing serious.”

Me:  “I have another home listed just a couple of blocks from here, it is listed in a similar price range with similar features and is under contract.  Would you be willing to pay at least a buyer’s agent commission if I can bring some of my overflow buyers from that house to you?”

Seller:  “No, we can’t afford to pay a single penny to an agent.”

This is not the total conversation.  I just wanted to give you the main points.  I pointed out that I had listed a similar home in the same area about the same time they listed theirs.  My listing was under contract for almost full asking price and is set to close soon.  My seller will be free from his mortgage payments in just a few more days.

This seller was adamant about not paying a single penny to an agent because he can’t afford the cost of the commission.  Adding up the costs of  paying the mortgage payments on a vacant home for a couple of months, the utilities costs to maintain this home as well as the payment on his new home.  How many more mortgage payments will he have to make before his home finally does sell, then close?  Next, consider the possibility of being forced to take a grossly reduced sales price when/if it does finally sell because the growing days on the market has stigmatized his home as undesireable?  Add to those costs, the cost of eventually paying an agent the commission on the reduced sales price because they just are not able to find a buyer on their own.  

It is understandable that some sellers would want to do it unrepresented.  If successful, it can save money.  But rather than automatically assuming that you are going to save money all around just because you wont be paying a commission, it is a good idea to analyze your individual situation.   You may find other factors in your situation that make paying the commission the most economical choice.

The other point I wanted to make is that this seller purchased a new property, apparently, without thoroughly thinking through the higher costs and the impact they would make on his family’s finances.   Once jumping in with both feet and blindfolded, he decided that he could recoup his loses by making the buyer of his previous home pay for his mistake.  I run across this attitude often as I talk to many sellers.  Sellers overextend their credit or make other financial mistakes and think that tacking the cost of those mistakes onto the price of their home is a cure-all for their woes.   It doesn’t work because buyers are not as stupid as the sellers think they should be.  A home needs to be priced at true market value, not at what the seller “needs” to get out of the home. 

If you are thinking about selling, give me a call and I can do a Comparable Market Analysis for your home.  Having a CMA the way I do them will give you a better picture of the market and show you what buyers are willing to pay for similar homes in your area as well as what they are not willing to pay.  Knowing what a buyer would be willing to pay for your home may help you decide that listing with an agent is a better option for your circumstances.

Filed under: Blogroll,Buying,Credit & Finances,Real Estate,Selling — Susan @ 2:28 pm




August 9, 2007

Selling and Safety

Yet another thing for a For Sale by Owner to take into consideration:   Safety should be a concern when selling your home.   Recently, in Park City, there was a couple caught for perpetrating a series of frauds concerning real estate.   This couple started in California and ended up in Park City where thanks to the quick thinking of a couple of agents, were arrested.  The couple would visit real estate offices and open houses posing as prospective buyers with cash.   Once at the open house, they would split up and take items of value.   In Park City, they found keys, got into a car and found a wallet.  They used the credit card from the wallet to rent a Hummer in Salt Lake City. 

This is only one of many stories that can be found concerning safety when selling a home.   I have heard of incidents where agents have been robbed, raped, or worse, but my point is that if you are selling your home on your own, you need to consider the possibility that you may be making it easy for someone to “case” your property or gain unwanted access to you or your family under the guise of being interested in your home.  

Consider the idea that you are home alone when a con artist comes to the door explaining that he would like to see your home.  What if you are at work and your kids are home alone when someone comes to the door who has no real intention of buying your home but instead has other things on his mind. 

Most companies have policies and practices in place to increase safetly such as not starting the showing process until the buyer has undergone at least a pre-approval process with a lender.  A copy of the driver’s license and other information is often required.   These buyers most often come by the office first leaving a record of their whereabouts and witnesses.  Unfortunately, there are no guarantees that you can be completely safe as long as there are unscupulous people out there thinking of new ploys to rob or harm others.  But, without an agent, you my be opening  yourself up to unnecessary danger.  

The Park City couple was caught because an agent was on the ball.  She told them that the owners had requested that no one be alone in the home.  She would not let them split up so she could keep her eye on them.   That agent along with another later found the man’s picture online on a California wanted flier.  They called the police who were able to track the couple down using Onstar on the Hummer they had rented. 

Filed under: Blogroll,Personal,Real Estate,Selling — Susan @ 2:57 pm




August 6, 2007

Walk Through Inspection

I wanted to go over section 11 of the Real Estate Purchase Contract.  I think it would be good to have a clear understanding of this right for both the seller as well as the buyer.   The worst problem I have seen on this section was from another agent.  I was amazed at the confusion this agent had concerning this section of the REPC.  He had his buyer do a “walk-through” after the Evaluation and Inspection Deadline had passed and then sent over a list of repair demands based upon the “walk-through”.  I tried to explain the problem he had created but he refused to read the REPC himself to clear up the misunderstanding or maybe he was just not bright enough to understand it and should not be representing clients in this capacity.   Anyway, we were able to work through the situation and save the deal but it is important to understand the contract whether you are a buyer, seller or especially an agent for either.   

11. WALK-THROUGH INSPECTION. Before Settlement, Buyer may, upon reasonable notice and at a reasonable time, conduct a “walk-through” inspection of the Property to determine only that the Property is “as represented,” meaning that the items referenced in Sections 1.1, 8.4 and 10.2 (“the items”) are respectively present, repaired/changed as agreed, and in the warranted condition. If the items are not as represented, Seller will, prior to Settlement, replace, correct or repair the items or, with the consent of Buyer (and Lender if applicable), escrow an amount at Settlement to provide for the same. The failure to conduct a walk-through inspection, or to claim that an item is not as represented, shall not constitute a waiver by Buyer of the right to receive, on the date of possession, the items as represented.

In order to fully understand this clause, we need to reference sections 1.1, 8.4, and 10.2.  Section 24 is important also because it references the deadlines by which parties must perform. 

 1.1 Included Items. Unless excluded herein, this sale includes the following items if presently owned and attached to the Property: plumbing, heating, air conditioning fixtures and equipment; ceiling fans; water heater; built-in appliances; light fixtures and bulbs; bathroom fixtures; curtains, draperies and rods; window and door screens; storm doors and windows; window blinds; awnings; installed television antenna; satellite dishes and system; permanently affixed carpets; automatic garage door opener and accompanying transmitter(s); fencing; and trees and shrubs. The following items shall also be included in this sale and conveyed under separate Bill of Sale with warranties as to title:

This section is included to protect the buyer from purchasing a home only to walk in after recording and funding and realize that the seller has taken all the light fixtures, faucets, etc., leaving only the bare walls in a shell of a home.  It has happened.  If there is anything specific that a buyer “thinks” should be included, this is where it should be put in writing to clarify any misunderstandings. 

 8.4 Response by Seller. If Buyer provides written objections to Seller, Buyer and Seller shall have seven calendar days after Seller’s receipt of Buyer’s objections (the “Response Period”) in which to agree in writing upon the manner of resolving Buyer’s objections. Except as provided in Section 10.2, Seller may, but shall not be required to, resolve Buyer’s objections. If Buyer and Seller have not agreed in writing upon the manner of resolving Buyer’s objections, Buyer may cancel this Contract by providing written notice to Seller no later than three calendar days after expiration of the Response Period; whereupon the Earnest Money Deposit shall be released to Buyer. If this Contract is not canceled by Buyer under this Section 8.4, Buyer’s objections shall be deemed waived by Buyer. This waiver shall not affect those items warranted in Section 10.

This section clarifies the rights of the buyer concerning the Evaluations and Inspections section of the REPC and deadline.   The “walk-through” is meant as a way for the buyer to see that the agreed upon repairs have been done or done properly.    

   10.2 Condition of Property. Seller warrants that the Property will be in the following condition ON THE DATE SELLER DELIVERS PHYSICAL POSSESSION TO BUYER:
      (a) the Property shall be broom-clean and free of debris and personal belongings. Any Seller or tenant moving-related damage to the Property shall be repaired at Seller’s expense;
      (b) the heating, cooling, electrical, plumbing and sprinkler systems and fixtures, and the appliances and fireplaces will be in working order and fit for their intended purposes;
      (c) the roof and foundation shall be free of leaks known to Seller;
      (d) any private well or septic tank serving the Property shall have applicable permits, and shall be in working order and fit for its intended purpose; and
      (e) the Property and improvements, including the landscaping, will be in the same general condition as they were on the date of Acceptance.

This section is protection for the buyer in that there are certain things that a buyer should be able to expect when buying a home.  This section can be excluded from the contract during the offer/counter-offer phase of the buying process, but the buyer is made aware of the risk and has the option of accepting or not.  Occasionally, we find properties offered on the MLS that state upfront that section 10.2 of the REPC does not apply.  Most would recognize this as “Sold As-Is.” 

The Real Estate Purchase Contract is a document that has evolved over the years based on real-life problems that have arisen from real estate transactions.  I am sure that it will continue to evolve as new problems and situations come up.  Buying a house is a huge investment for most people.  There was a time when “buyer beware” was the prevailing attitude but with the seemingly increasing numbers of people out there that are trying to make a buck on other’s misfortune, it is a good thing that buyers now have rights. 

It is also a good thing to make sure that the seller’s rights are protected as well.  Buyer’s remorse is real and happens more often than you might realize.   Too many buyers get into a home and suddenly panic that they have made a mistake.  They  want anyone and everyone else, especially the seller, to pay for that mistake.  Having a REPC that has been proven with time and real litigation cases is a benefit and protection for both buyers and sellers.  However, if everyone does not understand the REPC, it causes problems. 

It is important if you are planning to buy or sell a home to find a real estate professional that has a clear understanding of the Real Estate Purchase Contract or he/she cannot protect you.  If the agent you choose does not understand what he/she has you signing, then you may as well be signing away your rights.

Filed under: Blogroll,Buying,Real Estate,Selling — Susan @ 8:27 am




August 2, 2007

Cayman Brac, Vacation Homes

I just spend a week on Cayman Brac.  It was a great vacation.  Cayman Brac is one of the Cayman Islands which also includes Little Cayman and Grand Cayman.  Cayman Brac is a small island with a very slow pace.  There are only about 5 restaurants, a few stores, and only 2 dive ops on the island.    Everyone in my family was certified to dive until the weddings.  The new husbands were not certified so we have had to do something about that.  Both have their dive cards now and we joke about how the marriages are finally official now.  

I am quite impressed with the dive sites in the Cayman area.  We dived new and great sites each day.  It is known for wall diving and I believe it lived up to it’s reputation.  There are a lot of walls to dive and they are all spectacular…and deep.  I dived Nitrox all week so that limited my depth some, but I am not the type of diver that likes to go deep for the sake of going deep anyway.  I liked how we could go into a swim-through at about 80 ft and come out at 110 ft but you were still hovering over another 2400 ft or more.  We also squeezed through a few chutes going down through the first one and up through the second.  It was cool.  We called for hammerhead sharks each dive but never caught a glimpse of one.  I did see one or two reef sharks.    Some of us thought it was the same one, twice and others thought there were 2 sharks.  We also saw 5-6 Lemon sharks while eating at the shoreside restaurant.    I saw 2 lobsters that could give about 5 people an almost unending feast they were so big.   Finally, the MV Capt. Keith Tibbetts wreck was one of the best wrecks I have ever dived.  (The Rhone in BVI is still my favorite). 

I did some investigating on the real estate available on the island and am sure I could help connect anyone that may be considering buying a beach house on Cayman Brac and possibly the other Cayman islands.  There are several vacation homes available from “cozy” to “grand” and there are still quite a few lots available for those that would like to build their custom dream.  There is only so much beach front property in the world and I was surprised to still see several really nice ones available on this island.  I can only assume that it has been hiding under the radar so far and will soon be discovered. 

We like to travel around and try a new island each time we take a vacation (and of course a vacation is not a vacation unless you can dive) but as the family expands, we start to wonder if someday we are going to prefer to have one easy gathering spot.  We have decided that Cayman Brac would be one of our better options.  If you  are looking for a great vacation home, give me a call or email me and I will be happy to share my insights with you on this island or the many others we have considered. 

Filed under: Real Estate — Susan @ 6:31 pm