Posts Tagged ‘Sellers’
Friday, July 24th, 2015
Hackers are always finding new ways to get into our information, and lately they seem to be focusing heavily on real estate transactions. They are doing this by breaking into your email accounts and finding information about pending property sales, which they can use to their advantage.
The hackers find out what they can about transactions, including names and email addresses of parties involved in the transactions such as buyers, sellers, escrow or closing officers/companies, and other real estate agents. They then send emails posing as these people asking for purchase funds to be wired to accounts that they own.
How do you protect yourself from these hackers?
1. VERIFY: Don’t ever transfer ANY funds without calling to verify amounts and account numbers. Even if the email looks like it comes from the escrow company, take a few moments to call anyway.
2. KEEP BANK ACCOUNT INFORMATION PRIVATE: Don’t ever provide bank account information – make sure that your escrow or closing officer handles this in a professional manner. You should never give out your own bank account numbers. If there is a wire that needs to be made, all you need is the wiring information directly from the escrow company (or attorney if you are in a state that uses attorneys to close property sales).
3. KEEP YOUR EMAIL ACCOUNTS PROTECTED: It is important to protect your email accounts as best you can. Change your email passwords often, and make sure they are not easy passwords to figure out. Do not use your birthdate, name, or other obvious information. Definitely do not use the word “password,” your birthday, numbers like 123 or your childrens’ names. Try to think of passwords that do not make much sense and would be difficult to figure out, with a combination of numbers and letters.
There are some email servers that provide two step verification processes in order to log into email accounts. They use codes that are sent to you via a mobile app or text message – these codes are never the same but are required in conjunction with your password. Check with your provider.
Hackers will always pose threats, but you can lessen the chances of being victimized by being careful and vigilant.
Thursday, September 25th, 2014
Real estate information sites like Zillow, Trulia, Realtor.com and others have changed the real estate industry in many ways, most notably by their ability to provide instant information to consumers about home sales and statistics, neighborhood data, and other community information. When such sites start analyzing home value, however, the consumer is not getting accurate data in most cases, so beware and read on if you are a buyer or seller, or plan to be either in the future.
When such sites use estimates to tell potential homeowners or buyers what a home is worth, it is undoubtedly a poor attempt to create a Comparative Market Analysis – a tool which real estate agents use to assess value. Site valuation systems have created problems since inception and continue to do so.
The problem with such estimates is that in the majority of situations they are completely inaccurate. Why? Here are the reasons:
1. Third party site estimates only measure comparable sales in the immediate neighborhood, so if there are no recent sales or if there are sales in similar neighborhoods that make good comparable properties, those are not used to calculate the value of your home.
2. Third party site estimates cannot take into consideration key factors that are used in determining value, such as upgrades, view, location in the neighborhood (you may have a lot that is in a better area than the most recent sale, for example). They do not compare and contrast specific features of a particular property. If you put in a gorgeous built in BBQ and spa in your yard and upgraded the kitchen, bringing up the value, and the neighbor’s identical floorplan home with no upgrades just sold, your estimate will likely reflect the price of the neighbor’s home. This is a problem for buyers who are looking online for homes to possibly purchase.
3. Third party site disclaimers often are ignored: Most buyers and sellers using such tools view them as real estate gospel – or at least believe them to be accurate. Once they see such an estimate for a home they may be contemplating viewing in order to purchase, they may decide not to bother because according to the estimate it is priced too high. I get comments like this from potential buyers on my listings all the time.
Zillow, for example, specifically states on their site that “the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.” Not many people likely get to that page (you have to click on the question mark in the fine print when you hover over the asterisk by the “Zestiimate,” and then click for more information, which brings you to another page).
Real estate agents face many challenges because of these inaccurate analyses. Case in point: I have two listings on the same street; both nicely upgraded and about the same size and with similar views, but very different floorplans. Zillow has them listed with a $40,000 price difference. The model match of one of them (also nicely upgraded) is currently in escrow at a price that is not even close to the “Zestimate.” Because of this people viewing the other home, which shows a lower “Zestimate,” think that home is priced too high. But based on the upgrades and amenities and other factors the site cannot take into consideration, it is not.
The important lesson here for both buyers and sellers is to find an experienced real estate agent in the areas in which you are looking to buy or sell. Have that person prepare a detailed market analysis. Only then will you truly know the value of any property in your search area. Do not rely on third party websites that do not have the ability to take into consideration all the factors that an appraiser would look at when appraising a home – comparable prices, upgrades, amenities, location and view.
Wednesday, April 23rd, 2014
Friday, March 22nd, 2013
I decided to write this post because of the crazy antics I have seen in the real estate profession, especially lately. I want to preface this by saying that there are many wonderful, experienced and knowledgeable agents out there, but unfortunately there are even more who are not. Every week I see examples of contracts that are not properly executed, comments that are made that are incorrect, and even blatant misrepresentation of clients and agents giving legal advice (which is usually incorrect)…not to mention the plethora of ethical violations that happen on a regular basis.
If you frequent my blog you know that I always try to write things in a positive light, but I just don’t have a better way to say this: it is extremely beneficial for buyers and sellers to work with a broker who is also an attorney, OR if they want to work with their current agent, to have an attorney review their legal documents. I say this because it can help avoid litigation, and we all know that it is a litigious society in which we live.
Here are some of the things that I see happening all the time, which can be avoided by either working with a broker/attorney or having an attorney review your paperwork:
1. Agents drafting addenda to the contract without having it looked over by an attorney or broker (only attorneys can draft contracts, as they are trained to understand the legal ramifications. Since addenda are part of the contract they should not be drafted by people who are not attorneys…or in the LEAST their broker should review any drafted document before it becomes part of the contract).
2. Agents giving legal advice (only attorneys are allowed to give legal advice)
3. Failure to fill out the contracts correctly (omitting information, checking the wrong boxes or writing in language that could create legalities)
4. Trying to negotiate tough situations that could have legal ramifications (including short sales and tricky resale situations) – lawyers are professionally trained negotiators (again, other real estate agents CAN be good negotiators, but if you have a difficult situation you may want to consider having an attorney get involved).
There are many other ethical violations that continue to inundate our profession, and most of them do not depend on whether or not one is an attorney; however, an attorney is usually better able to recognize an ethical violation, especially when one is cleverly couched. This is perhaps the thing I see most often and, sadly, many of the agents committing offenses have no idea they are doing so. What does this mean? The real estate profession as a whole NEEDS to have better training standards and stricter license and license renewal requirements.
Some people think that real estate agents do not work hard – I know this is not true. The skilled and good agents work their tails off. In fact, I work longer hours as a broker than I did when I practiced law. If you have an agent who is not working hard, than you are working with the wrong agent. Please check into an agent’s credentials before signing up to work with one. Check into not only their real estate industry experience, but their education and extra certifications. Don’t be afraid to ask!
If you have an experienced agent he or she can tell you if a situation arises that is beyond the scope of their training or abilities, and oftentimes their broker can intervene and help straighten things out. If you do not have an agent and are thinking of buying or selling, there are several broker/attorneys out there who possess skills many do not, and the best part is…you pay no extra money to avail yourself of their legal skills if your agent is also an attorney!
The bottom line is to be aware so you can make sure you are getting the best representation possible when buying or selling real estate.
Thursday, February 21st, 2013
Sellers rejoice: it is finally a sellers’ market in many areas. For those homeowners who need or want to sell, this news has been a long time coming, after the last few years of the housing market collapse and bad news. There are some very positive market conditions that accompany this changeover:
Home price increases: If you follow the housing market in your area you may have noticed that prices are increasing in most areas (of course, you should check with your local real estate professional, as every area is different). The median national home price has increased 12.3% in San Diego county from this time last year, according to the National Association of Realtors (NAR).
The great news is that this will move many homeowners from being underwater, to being able to finally sell and move on. Many of these people were “stuck” in their homes because they owed more than their homes were worth. Zillow reported that over 2 million homeowners came out of the negative equity doldrums on their homes in 2012, and that is expected to continue this year. Over the next year we will see many of these underwater homeowners get out of negative equity situations, which will then increase the inventory levels and bring the market back into “normal,” aka healthy, status.
Increase in buyer demand: Also, according to NAR, buyer traffic has increased 40% from a year ago. There are many buyers out there ready to buy, and less inventory for them to see. This keeps prices climbing and leads to…
Multiple offers: Many listings are obtaining multiple offers, and many are also selling not only over comparable market value, but over appraised value. Lots of buyers are willing to pay cash out of pocket for homes where their appraisal has come in too low (they pay the difference between the appraisal and the sales price), thus driving neighborhood comparables upwards.
Market times have decreased: Due to all the above factors, market times have decreased and homes are selling more quickly. In San Diego county, average market times decreased for almost every city. The average days on market in North San Diego for detached homes was 36, down from 48 days in December 2012. Market time for attached homes similarly fell in the majority of San Diego county cities, some as much as 84%, with the median attached home market time all across the county at 48. (Source: HomeDex)
The market is improving and all signs are pointing toward a healthy 2013 for the real estate market. The biggest plus is that we will eliminate the negative equity situation for many homeowners, creating more inventory for buyers, and allowing many current homeowners to sell and purchase properties that are more cost-efficient for them. All this, of course, will create higher home values, which benefit neighborhoods.
All in all, this is a great time to be in the position to sell, so get your home in tip-top shape and enjoy the turn of the market. If you are thinking of selling your home, it is important to consult with an experienced neighborhood real estate agent.
Monday, November 26th, 2012
I recently came across a home that was for sale by owner. My client and I had been out looking at properties, and she later drove back through a neighborhood she particularly liked. She noticed a For Sale sign partially obscured on a home, which we had not noticed. I searched the internet for information about the home, but found nothing indicating it was for sale. I called the very nice owner, but when we finally connected my client had already flown back home and he did not want to cooperate with agents.
I know there are many agents out there who specifically seek out for sale by owner (or FSBO) properties, and many of them make it a priority to get those homes listed. But there are some big problems on both sides that need to be considered before hanging up a FSBO sign.
Issues Owners Must Consider
1. Exposure. As indicated in my example above, if you are going to sell your home it is extremely important to get exposure. The MLS is the number one place to showcase your listing, as thousands of property sites (where the buyers are looking) link to the MLS. Most active buyers have searches, oftentimes multiple searches, set up on agent sites and other house hunting sites like Zillow, Trulia and Redfin. If your home is not there, these buyers have NO idea it is for sale. In today’s market, where there is little inventory in most places, and where there ARE active buyers (and many multiple offer situations), it is simply silly not to have your home on the MLS.
If you still insist on trying to sell yourself, my best advice to you is to get your listing on the MLS. There are brokerages that will charge a small fee to do so, without doing any other work for you. It is well worth the expense.
2. Calls from LOTS of agents…who will want to know if you are willing too cooperate with them should they bring a buyer to your home. Most buyers DO work with agents, and if you are not willing to do so yourself you could be losing qualified buyers. An agent will not show your home if s/he will not get paid for making a sale and doing all the work involved in an escrow.
3. Unqualified buyer issues. If you do find buyers who are interested and not represented by an agent, you will be responsible for making sure they are qualified. This requires a lot of leg work, which most agents do before showing homes to their clients. You could take your home off the market for weeks assuming your buyers are qualified, only to find they are not. During that time you could have found other buyers, and then you will have to start all over.
4. Possibility of no showings, as many buyers are working with agents. This goes hand in hand with some of the above points.
5. Loads of paperwork and legal ramifications. If you are representing yourself in the sale of your home, you’d better be careful. You need to fill out a disclosure packet, and if you leave out crucial information it could come back to bite you down the road. An agent on your side is there to make sure you have filled out the disclosures correctly, and that all the paperwork is in order. Also important, if there ever is a legal problem down the road (and this is not a rare occurrence), it is nice to have the brokerage on your side to help you.
6. Other warnings. It is very important to note that if you are delinquent in your mortgage and are trying to do a FSBO, BEWARE. This is not something you should attempt on your own. You need to find a local agent who is experienced in delinquent properties so that you can discuss your options. If a short sale is an option I advise you to not even contemplate attempting one on your own. There are people who are experienced with short sales who can help you, providing a much stronger chance of approval.
Issues Buyers Must Consider When Purchasing a FSBO
1. No representation = Possible Legal issues. As discussed above, if you are a buyer purchasing a FSBO without an agent to represent you, you need to be very careful. If the owners do not fill out paperwork correctly and fail to disclose something, which later becomes an issue, you could be stuck with a legal dilemma. If you have an agent on your side to review all documentation and make sure you are legally protected, you will be in a much better position.
2. Escrow is a neutral party. It is important to know that the escrow officer can help you in some ways, telling you what paperwork you need. But keep in mind that escrow is a neutral party, and cannot give you any legal advice – they do not represent the interests of any single party to the sale.
3. Pricing. Make sure, if you are purchasing a FSBO property, that you have a copy of recent sold comparables in the area, and that you understand the prices and reasons for them. You obviously do not want to overpay for a home. This is not something you have to have an agent to do, but local area agents are usually very in touch with area sales and could explain to you why a particular home sold for more or less than the comps, and in doing so figure out the “right” price for a home you are thinking of purchasing. Most FSBO owners are savvy and know the neighborhood comps, but it is still important to study them yourself, especially if you are purchasing the property with a loan – lender scrutiny is rigid, and if the home doesn’t fit in with the recent comparables your loan will be denied (unless of course you renegotiate price with the seller at that point…something you need to be prepared to do well).
4. Must-Do’s in Buying FSBOs. If you are a buyer contemplating a FSBO purchase, it is imperative you do the following: get pre-approved with a lender first, get a good comparable market analysis – CMA (which you may be able to get from a local area agent even though they are not representing you), make sure you connect with escrow to understand what paperwork is needed, and have a home inspection.
Tuesday, June 12th, 2012
There is a strange phenomenon occurring in San Diego this Spring season – there are less homes for sale than anticipated. It is not uncommon for buyers to find themselves in multiple offer situations, being outbid and outshone by others, including cash investors. Will we see more inventory as we head into summer, and what is keeping sellers from selling? Let’s take a look at some of the possibilities.
1. Negative Equity Rising. According to an article in the Wall Street Journal, economists believe that as negative equity rises, people are less likely to list their homes because more foreclosures become a possibility, meaning property values go down. If sellers cannot get more for their homes, they will be unable to have the money needed for downpayments to purchase new homes, and to pay all the fees associated with selling. Thus, many are waiting for the market to go up before selling. Some of those who have to sell end up short selling their homes, which does not help neighborhood market values.
2. Fear. Many people are still afraid that the economy has not healed, and that the housing market has still not hit the “bottom.” To this I reiterate how important it is to focus on your own specific housing market, not the national reports. For instance, here in San Diego many communities are currently “seller’s markets” (for the first time in a long time) when it comes to condos, townhomes and attached homes. Multiple offer situations are common, and prices are rising. Many buyers are frustrated – they are making offers and are qualified for loans, but they are outbid. So, it is important to speak with a knowledgeable area agent to understand your specific market.
3. Election? Being an election year, many people feel that there will be changes within the economy and housing market if a new administration is elected, and those changes create fear and uncertainty. Some sellers choose to wait and see the results, so they can try to analyze where the market may go from that point. Again, it is imperative to really understand your local market, and not simply wait to see what might happen in the future. If you are in a market that has risen, and there is great demand there, you may be in the driver’s seat as a seller.
4. Investors in the market. There are many investors out there snatching up properties, especially those in the under-$300,000 price range. A large percentage of these investors pay cash, and their offers outshine those from buyers who need to get a loan, as they are easier to close. It is not uncommon to see buyers being outbid by these investors, and there is a lot of frustration amongst many buyers today. The only thing a buyer can do is be as well qualified as possible, and appeal to the sellers via a handwritten letter, making the sale feel more personal. This won’t always help, but I have my buyers write them, as it makes things more personal.
Most importantly, buyers and sellers need to understand the following: if somehow we knew that the market was going to improve from here on out, that improvement will be gradual – not a crazy spike like in the early 2000’s. Annual price increases of several percentage points a year will be likely. Sellers need to figure out the difference in waiting to make a few thousand dollars, compared to paying the mortgage, insurance, taxes and maintenance over that period of time. Buyers need to consider that when the market starts to correct, it is likely that interest rates will rise as well – so they could potentially be hit with higher prices and rates. There are buyers out there ready and waiting for homes to be listed, so speak with a qualified agent about your options if you are thinking of selling your home.
Photos courtesy of Dreamstime
Friday, January 1st, 2010
In the last weeks of 2009 there were quite a few conflicting stories on the state of the real estate market, and what we might expect in 2010. Several articles claimed that the bottom of the market was reached, that prices were rising and buyers were plentiful. They said this year would be the year the market began to recover.
Other articles (some published simultaneously) claimed that the bottom is not even in sight, that prices will continue to drop, and that because of several key factors (more foreclosures, the end of the homebuyer tax credit in the spring and the probability of rising interest rates this year), the market will not recover soon.
So, who do you believe? It is frustrating to try and decipher the messages in the opposing viewpoints, but one thing is clear: no matter which view you choose to believe, now may be the best time to sell your home to get the best price. Let’s look at the three biggest housing factors that will affect us in 2010 and you will see why.
1. Foreclosures. Many warn that we are on the precipice of another foreclosure iceberg. Option ARM mortgage rates will be adjusting for many homeowners this year, and many will not be able to pay the high mortgages. This could lead to a large number of defaults, as values will be much lower than the amounts owed on the properties. Loan modification programs have not been as successful as intended, and many homeowners will end up walking away from attempts to modify their loans (or the lenders will just give up and issue a foreclosure notice).
2. Homebuyer Tax Credits. The tax credits, which were recently extended and expanded to cover not only first time home buyers, will expire in April 2010. The credit has been a great help to the market and is one of the main reasons buyers have been buying once again. What will happen when they expire? Will buyers still be as willing to shop for homes? Many recent articles claim that the end of the tax credits will devastate the housing market. While I personally disagree with this theory (I think there will be more inventory and those with down payments will be able to get some fantastic deals and utilize negotiating power), if we combine loss of tax credits with a lot of new foreclosure inventory it may not be a jolt to the market. BUT if the job market improves these factors could prove positive for buyers.
3. Rising Interest Rates. Many economists have predicted that interest rates will rise in 2010, likely once the tax credits have expired. The Federal Reserve has kept interest rates low for a long time, and this has helped the market to stabilize in many areas, but programs to purchase mortgage-backed securities (which have kept the rates low) will end in March.
If the rates rise, will homes still sell? No tax credit, higher mortgage rates, and the possibility of many lender-owned properties on the market….this may not be good news, nor provide any incentives to buyers (who may just choose to sit back, watch the market and wait, creating a big fence sitter syndrome). This is the area where there are a lot of negative predictions, but we also have to keep in mind that on a historical level interest rates will STILL be low even if they crawl above the 6% mark, as some predict.
So…how does this make it a great time to sell? Because NOW the tax credits are still in place, the inventory is still historically low, and rates are low. If you are thinking of selling in the Spring of 2010, you really should consider selling at the beginning of the year while all these factors are in your favor. Chances are you will get a better price for your home before the Spring…something to think about.