December 10th, 2014
It never fails – every year I always think I will have a quiet holiday season and be able to catch up on personal errands and have extra family time. But every November things always start to heat up in my real estate business. Offers on listings tend to increase (often multiple offers), there tend to be a flurry of showings, and buyers step out in force to see properties.
I hear many real estate agents say that the end of the year is accompanied by a slow down in the real estate market, but I have not yet found that to be the case. Those agents who decide to not work as hard or to take a break miss out on the plethora of opportunities at this time of year. But for those who continue to work hard with existing clients, answer their phones and tap into their client base, this time of year can be lucrative.
Busy Time for Sellers
As for sellers, I have written blogs over the years as to why the holiday time is a great time to sell. The main reason is that there is not a lot of competition, so the buyers who are out there searching for homes (and believe me, there are many) don’t have as many options. If you list your home at this time and it is priced and shows well, you may be surprised at the amount of interest you get… and of course there is the potential for multiple offers. If you are a seller, make sure to speak with your agent about the best way to market and stage your home during the holidays, because that will have an impact on its selling potential.
The other reason it is a great time for sellers is because interest rates and inventory are still low. This makes it an optimal time for buyers who may have otherwise decided to wait until Spring.
Finally, it is fair to say that the majority of buyers who are out there looking at this time of year are very serious, not just looky-loo buyers. Many people would rather not focus on purchasing a home during the holidays, so as they say “the early bird gets the worm.”
Busy Time for Buyers
The end of the year/holiday season is a great time for buyers, for many of the same reason outlined above. There is less competition, the listings that are active are usually placed there by serious sellers who need to sell, and right now interest rates are still very low. In my opinion many properties are priced more accurately at this time of year than say in the Spring, when many sellers test out the market to see how high they may be able to list above comparable sold properties.
Buyers, sellers and agents can all benefit during the last quarter and during the holidays if they continue to work extra hard into the New Year. Happy buying and selling, and I hope everyone has a prosperous and happy holiday season!
December 4th, 2014
“The average person puts only 25% of his energy and ability into his work. The world takes off its hat to those who put in more than 50% of their capacity, and stands on its head for those few and far between souls who devote 100%.” – Andrew Carnegie
There is nothing wrong with being average – in fact, some people are quite content with the moniker – not fighting to break glass ceilings and striving to be “better,” however that may be defined. Societies rely on a mixture of those who are happy with “average” jobs and those who are not and need to achieve “more.”
I find the old adage that 20% of people do 80% of the work to be true in the real estate sales profession. The industry exemplifies the average/exceptional delineation: the average agent sells 4-6 homes a year (personally I think it’s probably more like 2-3), and makes $34,000-45,000. The main reason is most agents are part-timers, which means they have other jobs and consider real estate a second (or third) job, or even a hobby. They do not put in enough hours and dedication to make real estate a profession, for many because it is a tough thing to do and income is never consistent (except for those who are top producing agents).
To excel at any job one needs to put in sweat and time, and real estate is no exception. Those who spend years building relationships with clients will eventually benefit from referral business; those who stick to their own proven way of doing business and work hard at it on a daily basis will see results, which will allow them to climb out of the average category. This is true in any profession. The question becomes”is average good enough for you?”
Many real estate agents and brokers lament over average agents and the problems that can accompany them – mostly issues related to ethics, not working hard enough or not being careful enough from a legal standpoint. After all, there are legal ramifications galore in this business, so one can ever be too careful, stop learning, or fail to stay on top of current laws and rules. I have written many blogs about the need for stricter rules and licensing standards in the industry, so I will not go into that here, but the irony is that if those things existed the profession would be treated more like a profession, and people would have to hold themselves to higher standards (brokers too would have to hold salespeople to higher standards).
So, are you average in your industry and want to get out of that rut? If so, you may want to ask yourself why you feel that way. If you are a person who strives to be above average but are not in that space, you should figure out how to excel. Evaluate your business, make a business plan, educate yourself further, reach out to all your clients and find a mentor. There is no need to be an average agent. On the other hand, if you are happy where you are then stay there, but make sure you do not ignore important issues like learning new rules, laws and forms. Either way, decide where you want to be and be the best you can be in that position.
December 1st, 2014
The chart below shows the latest existing home sale numbers for October, as well as median home prices, unsold inventory index, median time on market, and the housing affordability index. The National Association of Realtors reported a 2.5% increase for the homes sold in October, compared to the same month a year ago. This makes it the first month in 2014 to see a significant yearly increase in home sales. The reasons for the increase were cited as lowering of mortgage interest rates (which dipped under 4% in October) and the slowing of home price appreciation.
Interestingly, several reports I have read indicate that housing prices are not going down, and that this trend will continue into 2015, with many states hitting new all-time highs as the housing recovery continues. Of course, much will depend on inventory levels, mortgage rates and other factors that we cannot predict, but the positive note is that properties are definitely going into escrow. Most escrow agents, home inspectors and appraisers I have spoken with are busy.
Chart provided by the California Association of Realtors.
November 29th, 2014
November 24th, 2014
Thanksgiving is more than my favorite holiday. It reminds me that I have so much to be thankful for, because in our busy lives it is easy to forget to be thankful all the time. Like me, I hope you take some time off this week to be with those who are important in your life.
So this Thanksgiving, think of all those people in your life who enrich it, all the experiences and opportunities that make it beautiful, and the many blessings that you have every day. Thank you for being a part of my expression to the world through my writing – I appreciate all my readers because you give me a reason to write.
From my home to yours, I wish all of you a very happy Thanksgiving. May it be filled with love, laughter, lots of good food and most of all, peace.
November 21st, 2014
Today on Twitter a follower made a comment about the benefits of having a home pre-inspection prior to listing a property. There are some agents who recommend doing so and it can be a good idea. However there are also agents who would not recommend doing so because it could open up a can of worms for the seller. I thought it would be a good idea to look at the benefits and disadvantages of having a pre-inspection.
Issues with the Home that the Seller may not Know About Could be Revealed in a Pre-Inspection
Benefit: A pre-inpsection gives sellers an opportunity to repair/remedy any defects or problems that are discovered, in order to present a home to the buyers that has been well cared for and has no deferred maintenance. This means there will not likely be any surprises when the buyers have their inspection. Oftentimes inspectors discover issues of which the sellers were not aware. Most buyers will ask the seller to repair such issues or credit them through escrow so they can do so after closing, or even reduce the price because of any issues. A pre-inspection could eliminate any surprises, but keep in mind that the buyers still may have their own inspection (something I always recommend), and it is possible that their inspector may discover other items.
Disadvantage: There could be some major issues discovered that the sellers did not know of, that could cost a lot of money to fix. If the sellers do not have the funds or do not choose to repair such issues prior to sale, they now are aware of these problems, which means they must disclose them to buyers. Disclosure of know factors affecting the property is required by law. One could argue that no matter whether the buyers are told via disclosures that there is a problem, or whether they discover it themselves through a home inspection, they will still likely seek repairs or a credit, so it may not matter either way.
The one problem I see with having a pre-inspection is that if something major is discovered, meaning the seller has to disclose it, it could affect the value of the home (depending of course on the issue). For example, say there is a crack in the swimming pool, or the roof needs to be replaced. These could be costly issues to fix, and could detract from the value of the home. The seller can turn it into a positive and deduct the repair costs from the value right off the bat if aware of issues, OR if not aware of such issues and presented with a repair request by the sellers, it is possible the seller may be able to negotiate a price under full repair costs.
A Special Note About Termite Inspections
It is important to note that this month there will be a big change to the California Residential Purchase Agreement (RPA) regarding termite inspections. The current contract has an addendum called the Wood Destroying Pest Addedum (WPA), which normally specifies that the seller is responsible for Section 1 items – damage caused by pests. This would include dry rot on wood and fumigation, which could be costly. The new RPA eliminates the WPA, so it will now become a repair issue. This means that the buyer will be responsible for paying for a termite inspection, and any issues discovered will need to be negotiated with the seller, along with any other non-termite repair issues.
Keep in mind that a buyer can write something different into the contract, such as sellers are to pay up to a certain amount, if necessary, for any termite work discovered. If sellers have a termite inspection prior to listing and discover any issues, they can inform the buyer up front in disclosures so that the buyer can negotiate those repairs or decide what action to take. I will be suggesting to my sellers to have termite pre-inspections, as I feel it could eliminate potential problems. It also allows the seller to choose a reputable termite company.
I suggest always to discuss the above with your agent before listing your home so that you are aware of your rights and can make an informed decision.
November 18th, 2014
Every now and again something terrible happens to a real estate agent, reminding all of us just how dangerous our business can be. The tragic death of Arkansas agent Beverly Carter in late September, murdered by a potential client whom she met to show a home, made agents think about safety precautions. Similarly, I remember years ago an agent in the company I worked for was brutally attacked and raped at a vacant house – again, she was meeting a potential buyer there.
The nature of a real estate agent’s job means that sometimes he or she will need to meet unknown persons to show property, but there are ways to be safe and still do our job. Here are 9 precautions that every agent should utilize to keep as safe as possible.
1. Meet potential clients at your office or a neutral place. Meeting an unknown person at a home could be deadly. Suggest having the person meet you at the office and sit for a while to discuss the property/properties you will be viewing. If you feel uncomfortable at all trust your instincts, and do one of the following.
2. Tell someone your plans – addresses included, and identify the persons you are meeting. Provide the name of the person(s) you will be be with (see number 4 below)
3. Have another agent or other person go with you. This is always a great idea and probably one of the easiest ways to protect yourself. You can reciprocate when that person has a showing one day. Find someone in your office with whom you can team up. If that is not possible or if you work alone, you can find a showing buddy from another company, or a friend, neighbor or spouse.
4. Get a copy of the client’s driver’s license, and tell them it is office policy to protect agents (it should be – discuss with your broker). If you met them at your office this is easy to do. If not, snap a photo of it with your phone and send it to a colleague and someone close to you, along with the address where you will be and the time.
5. Have someone check in with you via cell phone – either by calling or texting. Make a plan as to how often someone should call to check up on you, and what that person is to do if you do not answer.
6. Always have your phone in your hand during showings. Pepper spray is another good idea.
7. Never walk in front of the client – hold open the doors and let them go first. Stand outside rooms while they wander in.
8. Do not include your photograph in advertising material – I know many agents feel they need to do so, but it is not a smart idea. Criminals can choose you based on what you look like, and then call to schedule an “appointment.” Better to be called because someone really is interested in a home, not because they like something about the way you look and want to harm you.
9. Trust your instincts. This is by far the most important bit of advice. If you feel uncomfortable at any time you need to either get out of there or find someone to join you.
November 11th, 2014
The final walkthrough is a necessity for buyers purchasing a home, but many buyers do not understand the purpose of the walkthrough and there are many important aspects to getting it completed correctly in order to protect their legal rights.
First of all, it is important to understand that the final walkthrough is NOT a contingency to the sale, so in other words if a buyer discovers something at the walkthrough and all contingencies have been released the buyer does not have the right to cancel the contract at that point – doing so may put the buyer in breach of contract.
The purpose of the final walkthrough is threefold:
1. Make sure the home is in the same condition as when the offer was made
2. Check to see that any negotiated repairs were completed as agreed
3. Make sure seller has completed any other obligations under the contract
Of course, it is possible that things will be discovered during the walkthrough that give the buyer certain rights against the seller. If this occurs, there are 2 things the buyer needs to do in order to preserve her legal rights against the seller after closing.
How to preserve your legal rights after close of escrow when issues are discovered at the walkthrough:
1. Indicate on the walkthrough form (which in California is called the Verification of Property Condition, or VP for short) specifically what the issue is (e.g. seller did not make __ repairs as specified in the contract).
2. Have an attorney write a “right to reserve” letter to the seller and his agent, specifically identifying the issue(s) that were neglected. An agent can do this as well, but since most agents are not attorneys the agent needs to make sure he or she does so correctly. The California Association of Realtors has a library with examples of these letters. Make sure the agent runs it by her broker for approval before submitting it.
If the buyer has completed the above steps then s/he will be able to pursue legal action against the seller after closing. Of course, the first things that should be done is for the agent to discuss any issues with the listing agent – many times the seller will simply take care of them. Make sure to still complete step 1 above just in case.
Buyers have many legal rights when purchasing property, especially in the state of California (a pro-buyer state). It is important for all buyers to understand each and every part of a real estate transaction, and how it will affect his or her rights. Staying legally protected is not hard if you start off with a smart and savvy real estate agent who can help steer you through the process from beginning to closing.
November 6th, 2014
People always say you can’t choose your neighbors, and for the most part this is correct. I suppose if you did want to choose your neighbors you could purchase a new construction home and have friends and family purchase on the same street. But the reality of that happening is of course slim. So when you buy a home you may try to meet as many neighbors as possible prior to signing off on all the paperwork, but of course you never truly know someone from just a meeting, so most of it is left to chance. The same is true of co-workers and bosses, and for real estate agents.
I have worked with many agents since I started in this business, and many of them have been pleasant and professional, kind and cooperative. That obviously makes the entire transaction process a much better experience for all involved, including my clients and myself. It is so wonderful to be able to work with someone who returns calls, stays on top of paperwork and is willing to go the extra mile as a representative for her own clients and also as a professional.
Of course, there are many agents in the real estate business who appear to be professional but are very difficult to work with. I have a collection of names in my head, based on past experiences, whom I hope never to work with again. Of course I can only control that outcome so much – if a client wants to buy a home and the listing agent is someone I dread working with I may be left with no options….So what is an agent to do when the agent on the other side is a pain in the neck?
Here are a few things I have learned over the years that agents can do when they are in those tricky situations, in order to try and ease any difficulties or challenges:
1. Set goals/intentions from the start. If I have to work with a difficult agent I will let the agent know from the start what I expect and how I would like to work together.. I will send an email identifying a time table of all the important dates and responsibilities – including my own – and provide all contact information. I will set my own expectations as to paperwork and the best way to communicate. If the person is not someone who is easy to talk to or hard to get a hold of, I will spell out the best way to communicate. I also find out right away if there is a transaction coordinator or assistant involved, and make sure to cc them on every communication.
2. Involve the agent’s broker and your own broker. If things are challenging I will always involve the agent’s broker. I am not shy and have called many brokers. Most of them are more than willing to step in and assist with deadlines and communication. In the case where the agent IS the broker, I lay it all on the line and tell the agent that s/he needs to cooperate and communicate. Usually this works, but if not then sometimes you have to be prepared to threaten to file a complaint (luckily I’ve not had to do this). If you are an agent working for a broker, it is important to involve YOUR broker right away as well. That is what s/he is there for, so don’t feel like you have to deal with difficult people on your own.
3. Put everything in writing. One of the first things I learned in law school is that you always have to have a paper trail. I ALWAYS put things in writing during a transaction. If I speak to the other agent over the phone or in person, I follow up with an email reviewing the conversation. If things go sour and there is a complaint filed (or even worse, a lawsuit) down the road, that paper trail will be your salvation. Save all emails in a file on your server.
4. Document all communications that are not in writing. Document all phone calls – it is easy to keep a running Word doc and add to it as needed. When the sale closes save everything on a CD or a file in your system.
5. Stay professional throughout, but stick only to the facts and keep things tight. No matter how much you may want to give a nasty agent a piece of your mind, remember that doing so only brings you down to their level. Instead, use your inner strength to remain professional. Keep communications short and to the point, and remember to document everything.
No one wants to work with a unprofessional or difficult person, but we all have to at some point. As I have taught my children, what is important is how we react to challenging situations. Losing our cool and getting upset won’t help our cause at all, nor is it healthy, so keep your chin up and stay professional and positive. You can always get out your frustrations by exercising.
October 29th, 2014
Not long ago someone commented that I have the ideal job, since I am able to take time off whenever I want and live a leisurely lifestyle. Good thing there wasn’t any liquid in my mouth at the time, as it likely would have spewed out all over the commentator (pardon the image). The misperception that real estate agents have “easy” jobs is not uncommon, since we do not have to punch a time card or physically sit behind a desk all day (although there are many days I do that…and nights too). But in reality working in the real estate industry is like riding a roller coaster, with the highs and lows, periods of being excessively busy and then dead, and periods where the paychecks are coming and then stop.
The career of a real estate agent has been glorified in these last few years by all the “reality” real estate television shows. Shows like Million Dollar Agent portray agents driving expensive cars, wearing high-end suits, spending long business lunches in top restaurants and listing (and quickly selling – with little negotiation I may add) million dollar plus properties. They really look like they are living the life!
Of course, those shows are heavily edited, not to mention scripted. You don’t see the nitty gritty – the money and time the agents spend on marketing the homes, the numerous showings, all the paperwork the agents need to handle, preparation for listing presentations and meetings, inspections and negotiations over things that may come up during escrow. So, if I knew absolutely nothing about the business I can see how it might look like an ideal career based upon the shows.
The truth is that this business is H-A-R-D. If you want to be successful, you have to work your tail off, and I know I work harder than many of my friends who have jobs in other fields. I can’t come home and escape my work, because it never stops. Most people who buy and sell homes expect me to be available after hours, when they are off work…and on weekends. Sure, I could decide not to answer my phone or work when I’m needed, but then I wouldn’t be successful. The key to my success is referral business, which I will only get if my clients feel I did a job that is beyond outstanding. Many of my clients have worked with other agents in the past, and the biggest compliment I get is when they tell me their experience with me, compared to the last agent, was like night and day. (To read more about what real estate agents do, read this article.)
Today I continued to work on a major issue that has arisen in a home sale that is in escrow. The time and energy I have spent on this issue is great, and it has been very stressful for all parties involved but we are finally making progress. This morning my client said to me, “I seriously don’t know how you do this!” Believe me, there are days when I ask myself that question, but ideally there are two things that keep me on the roller coaster:
1. I love my clients. I really do. Buying or selling a home is not only a big decision, but it is also an emotional one and it has legal ramifications. I feel good that I can offer advice and guidance to clients so that they can get through the process and feel great when it’s over. I love seeing them happy in the end, and that is my goal. It means I have to work hard to achieve the end result, but it also means that I end up with new friendships. I have met the most remarkable people working in this business, and it has been a pleasure to help them.
2. I have to keep making a difference in this industry. If you are a regular blog reader you know that I dish out frustration with the real estate industry and the lack of adequate training for agents. Sadly, there are a lot of agents who either don’t really care about their jobs, or do not realize that they need better training and skills to work in this industry. I know that my dedication and skills do make a difference, and if I can help improve this industry and the reputation it has, one client at a time, then I am making a difference. Like I always say, if you don’t like what you do, than do something else, because it shows. [As an aside, I have had other agents tell me they “hate” being agents…I wonder if their clients know that -?]
I think my ride on the real estate roller coaster will last for a while, and I hope that during that time I can make a difference in the lives of those I help, agents with whom I work, and the industry in general. If every other agent, or person working in any field, does the same then together we will make a big difference in the world.