Posts Tagged ‘buying real estate’

Home Sellers: You Get What You Pay For

Thursday, October 1st, 2015

Have you ever thought about your experience buying clothing, and compared shopping at say Nordstrom, to shopping at a discount clothing store? Did you notice the service difference – sure, the Nordstrom employee works on commission, but that is actually a benefit to you if you need help finding the right outfits. He or she will go out on a limb to pick the perfect shirt, slacks, tie or accessories to make you look your best. For sale

Selling a home is the same. I always tell potential sellers when I meet them to discuss listing their homes that ANYONE can list a home – it is not rocket science. The part time mom/real estate agent who only works weekends, the new “green” 18 year old agent with his first client, or the experienced agent – they all can do it. But you have to make sure to ask the right questions and get the right information to assure that you truly get the best representation.

You may have noticed agents in your area who might boast that they will list your home for less than the competition – some for say a 1% fee, and others for flat fees. While this may sound great to you as a seller, make sure you interview a seasoned listing agent and compare what you will get from each – you may be surprised.

Here are the things you need to ascertain as a potential seller to make sure that your home will be marketed properly and survive the escrow process in order to close:

1. Responsiveness – Many discount brokers will take your fee and put your home on the MLS, but that is where the buck stops. If you have questions or concerns you may find it hard to ever reach them, let alone have issues responded to. Even “big” agents who list many properties have this issue – there are several of them in my area and I have helped clients sell homes who had worked with them before and were unsatisfied with their lack of responsiveness. This is important to you as a seller, because you need an agent who is your partner and can communicate both effectively and continuously throughout the entire process from listing to closing.

RE_cancel2. Marketing – Does the agent’s marketing budget mirror the commission you are paying? In other words, if the agent is taking a lower fee, is this going to cause your marketing to be less than superb? I can tell you that I get a LOT of real estate information in my mailbox, and about 90% of it is junk – poor quality, bad images/non-professional photography, grammatically incorrect/spelling errors. The way your home looks to potential buyers is what will drive them to want to see it – it is a feeling and a lifestyle that you are selling, not just a house with walls.

3. Communication with other agents and parties: Your listing agent needs to be able to effectively communicate with other agents, loan officers, lenders, escrow and title representatives throughout the sales and escrow process. This includes following up with showings and alerting agents of potential buyers of any changes or new developments with the property. Problems always come up that need to be addressed in order to stick to the time frames identified in the contract – make sure your agent knows how to do so and is willing to stay in touch on a daily basis.

4. Negotiations – This is a big one. Your agent must be a strong negotiator. Unfortunately many real estate agents are not strong in this regard, and many contracts do not come to terms or fall apart after agreement. Negotiation skills are needed not just at the start when a contract is received, but throughout the entire escrow period. Getting an offer is just one part – keeping those buyers excited about their new home until closing is another issue.

5. Paperwork – if you work with a discount agent/brokerage, make sure that your agent explains how the paperwork will be handled. Real estate transactions contain a LOT of paperwork, and they are all LEGAL documents! There are many consequences to filling out paperwork incorrectly, including law suits years after your home sells. You need to make sure your agent knows how to properly handle the paperwork and how to coach you in filling it out correctly so as to avoid legal ramifications.

The bottom line is that you usually get what you pay for – like comparing Nordstrom quality and service vs. Walmart quality and lack of service. Unlike buying a shirt however, selling a home comes with many legalities. Make sure you are protected and find an agent that will work hard for you to keep you informed, compliant and safe.

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New CA Policy Could Get Realtors Into Trouble Faster

Wednesday, July 23rd, 2014

Kudos to the California Bureau of Real Estate for a smart new rule that could get unethical agents into trouble more quickly. One of the biggest problems in the real estate industry in California is that agents who are accused of committing unethical acts, or those who break laws or rules, were subject to a lengthy process of administrative hearings. The agent or broker could continue to work in the industry for a long time until it was found they actually did something wrong (and many claims are not even investigated because there is not enough people-power to do so – but that is a story for another blog). images

Here are the highlights of the new rule, which was announced this month:

1. Citations issued more quickly. The new rule, referred to as “cite and fine,” will give the BRE the authority to issue citations and assess fines prior to hearings. The rules apply to both real estate professionals and those who practice real estate without licenses (those without licenses will likely be subject to higher fines).  Fines will go up to $2500.

Here is how the new rule will work. Once a complaint is filed, the administrators will conduct an investigation, audit or examination of records. Action will be taken depending on the type and degree of the violation. Most minor offenses (such as failure to include the agent’s BRE license number on first point of contact marketing materials) will be subject to fines.

2. Offender names will be available via public record. Names of those who are cited and/or fined will not appear on the BRE website or under the licensee’s record, it will appear in the public records for anyone who chooses to submit a request through the Public Records Act.

3.  Money collected from fines will go to a good cause. All the money collected by the BRE from offending licensees and non-licensees will go into a fund that helps victims of real estate fraud. Again – kudos to the BRE.

This new citation and fine system is a step in the right direction toward the prevention of rules and ethics violations in the real estate industry. Hopefully the BRE will continue to refine policies AND licensing and training requirements. I will keep my hopes up that this is the first in a succession of positive moves to make the real estate industry more professional and respected.

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Don’t Blow Your Real Estate Purchase: Understanding Material Terms

Monday, October 17th, 2011

Understanding the difference between material and non-material terms in a real estate contract is of great importance to the real estate purchaser. While most agents understand need for specificity in real estate contracts, buyers and sellers should also know the difference between material and non-material terms in order to avoid potential problems with the sale of property.

Material terms to a contract are those that affect the agreement as a whole, such as whether a buyer will pay cash or get a loan, the price of the sale or possibly the closing date. If the buyer breaches a material term s/he risks losing the initial deposit, as well as a possible lawsuit/arbitration.

Some examples of material terms include purchase price, close of escrow deadlines, and other terms in the contract upon which acceptance was based.

In most contracts where a loan is obtained it will not be considered a material term if the loan rate or product differs from that described in the contract, so long as the buyer can still perform within the specified time frames. But if a buyer needs to change a material term it can be considered a breach, giving the seller the ability to cancel the contract.

Take the example of a buyer who has made a cash offer but decides to obtain a loan after acceptance. As this is a material term the agent will need to approach the listing agent and ask if the seller would be amenable to this change. Oftentimes it could create a delay in closing, and could be a problem in a short sale transaction (where lenders often approve sales at lower price points when cash offers are presented). The buyer’s agent will need to discuss this change with the listing agent to see if this is possible, and it then should be put in writing and signed by all parties to the contract. If not, the buyer is bound to proceed with the terms as they were defined in the contract, unless that is impossible and you have not yet removed contingencies.

When writing a contract for the purchase of real estate it is imperative to have all the information at hand so as to avoid a material breach after acceptance. Agents should talk to the lender and make sure their buyer is qualified, discuss important dates with buyers, check current proof of funds on cash transactions – these are all things agents know but sometimes overlook. Many potential issues are covered during the contingency period, meaning that if the buyer cannot qualify for the loan s/he wanted during that time, or if a problem is discovered with the property after a home inspection, it is not considered a breach and the buyer can choose not to proceed without repercussions.

Doing your homework early, before submitting a contract, is a win-win for all parties to real estate contracts. Do not worry – that is why you have an agent representing you, and s/he can help walk you through it. Now more than ever it is critical to be diligent, so make sure your agent explains the important details.

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