Are You Getting What You Paid For?

As I drive around certain neighborhoods, I’m starting to see signs pop up on listings where a reduced commission is offered. Further, I have talked to other agents in our office that have gone to listing appointments and did not get the listing because the seller decided to go with an agent who offered a vastly reduced commission. But, are these reduced commission really in your best interest? Are they truly improving your bottom line?

For a seller to receive top dollar for their home in any type of market, representation is key – and are you getting that necessary representation and exposure? This all narrowing it down to you technically “getting what you pay for”.

As many of you may know, advertising is expensive and these expenses are only increasing over time. And advertising is not the only expense out there – you are looking at expenses for flyers, strong internet presence, paper advertising, open house expenses (food, beverages, signage, flyers, neighborhood mailers, advertising, gas for the vehicle (primarily when it comes down to showings and presentation of any offers that come in), signage, lock-boxes, photography, and at times video – and now the ever increasing need in making any advertising mobile friendly. Everything necessary to optimize your listings performance in getting it out there in front of the consumer. Further, if another agent brings in a buyer, this commission is then split with the cooperating agent – will cooperating agents be willing to show to their clients a listing that offers a non-typical, low commission over a commission they are used to getting? Or, if the normal commission is being offered to cooperating agents, how much less does that mean your agent is receiving and thus being able to place into the presence of your property?

So, how much of this is being sacrificed or are you willing to sacrifice?

I am not saying that all “bargain” commission offices or agents have reduced services. Some may be able to offer everything mentioned and still offer a lower commission as well. This is when it becomes important to compare services offered by each office/agent and establish what would be the best for you and your needs.

Ask such questions as:

  1. What type of marketing plans do you offer? Internet, paper, neighborhood outreach….
  2. Are you willing to do open houses?
  3. Is listing information and advertising mobile friendly?
  4. How quickly are you able to respond to inquiries? Will it be you handling the inquiries are someone else?
  5. Are you going to be available to show the home, or will someone else?

Overall, just interview and compare because I want you to have maximum exposure regardless of who you use – which not only increases your chances of receiving market value for your property, but vastly increases your chances of a quick sale.

Be Faithful

Many buyer’s now-a-days shop for homes online; and then when they find one they are interested in, they will reach out to a real estate agent – be it one they know, one they were referred to, or one of the several agents listed as a contact agent for that online listing. The latter is where it is easy for a buyer to fall into a trap – a trap where they end up writing an offer with one of those “contact agents” and not with the agent they were initially working with.

Did you know that when you do the contact agent or the request more information form on one of the many home search engines available on the internet, it does not go directly to the listing agent? The request goes to every agent that was listed under that contact request form, along with the listing agent – meaning that you could have up to six different agents pressuring you into viewing and writing an offer 91774-8ef9eon either the property you requested information on or other properties currently available on the market.

This is all well-and-good if you have not already been working with an agent – you get to choose the best agent for you this way, or the first one that contacts you. But, if you have been in contact with an agent, one who has been sending you listings, showing you properties and getting you into contact with lenders and other contacts, it can cause an uncomfortable and even a frustrating situation – one that is upsetting to the agent you were already working with, the agent who has already put in the time and energy to assist you in purchasing your next home.

When you are shopping around online and see a house that intrigues you, reach out to the agent you have already been working with. They are able to pull up that very same listing on the multiple listing service and find out even more information regarding that listing – information that is not available on public websites. They can also find out who the exact listing agent is and reach out to them for more information. Your agent is also able to show the listing to you as well. Many times, it feels like a “slap to the face” for that agent.

If you do end up filling out the request information form, do not let agents push you into viewing and writing an offer. Just let them know that you were just looking for more information and are already working with an agent. That agent should not mind, but if they continue to push you – hang up and let your agent know.

Some tactics that I have seen or heard about some of these agents doing is baiting buyers into making a commitment with them – through scare tactics (this listing will not last long, so you must view it and write an offer today), by stating that since they are the listing agent you are only allowed to go through them to view and write an offer, or by saying negative things about the agent the buyer is working with (evening knowing that some statements are false).

Overall, just stay loyal to the agent you have already been spending time with. They have become familiar with what you are looking for, what your style is, and have come to know you as a person – each important characteristics when searching for a home.

How Well Is Your Agent Representing You? Does Your Value Matter to Them?

Having been an agent for over 11 1/2 years, one of my biggest pet peeves with other agents is there representation of their clients – be it the write up in regards to the property, the amount of pictures they take, or the quality of the photos taken. Some do “shotty” work no matter what the price range is, while others base it on the price range of that home – are you one of those victims? And, yes, I said victim. Agents who do this are not taking your best SKMBT_C35161130105000_0001interest to heart, or they are just plan lazy. With our world being so virtual/digital, it is important for your listing that it is being represented in the best way possibly. Their job is to draw the consumer in, to peak the consumers interest, to make them want to gain more information about your home. And how is this done? By taking quality photos and by story being told through the write up describing the property to its fullest benefit. They job is to sell your property.

Just today, I was going through some listings for one of my clients and I came across a $200,000 listing that had one sentence in the description and three pictures of the front of the house only. Do you think this agent is representing their client very well? Do you think this type of advertising will draw a buyer over another listing in SKMBT_C35161130105001_0001the same price bracket, that has a description painting a vivid picture of the property for them, and has 20 photos showing the home and all its features?

With the way our multiple listing service works, all listings entered by the agents is then launched onto on of the
top three largest home search engine portals used by consumers today – Realtor.com. This same “lack” of information is being presented to thousands of potential buyers and is competing against 100s, if not 1,000s, of other listings out there.

I’m not going to lie, there have been times I have had writers block. There have been times I just couldn’t think of what to saw, but that did not give me an excuse to put out there a one sentence description, and it pushed me even more to ensure that I had quality photos available so the consumer was able to see what I was not able to put into words.

When interviewing listing agents, ask them to supply listing sheets – of either past or current listings. You can ask for ones in different price ranges or for ones that are in the same price bracket as your home. Ask them for sample photos to view for those same listings and how many photos they placed with that listing. Remember, these agents are looking to represent you and not the other way around.

The Purchase Process

 

Underpricing

There are many agent’s out there who brag about receiving “multiple offers” on their listings, how the are able to get homes sold for over asking price, and/or they were able to get a home sold within a few days on placing this property on the market.

These facts all sound enticing from a Seller’s standpoint, but there is something that should be questioned (especially if such activity does not fit with the current real estate market) – were these homes underpriced?

If it is a “hopping” market and properties are just flying off the shelf, then such activities (as described above) are to be expected, from ANY AGENT.

If it is a slow market, with low buyer activity and extended list days on the market, then I would really start to question those select agent who are claiming these “attributes”.

Underpricing a home means that the seller looses out on selling their property for its “true” market value and not receiving top dollar for their home – which also means money is lost out for the seller; it is also unethical for agents to “underprice” a home. Agents take a pledge to protect, along with promote, their clients interests; and one of those interests is being honest with the seller.

This is why so many recommend that sellers talk to more than one agent – at least three. Ask that each comes up with a WRITTEN Comparative Market Analysis (CMA) for the property. Look closely at the CMA and the comparable properties being used. To not be afraid  to ask questions, such as how the agent came up with the recommend home value and why the agent chose the comparables being used.

The biggest and most important advice that I could give you, is to plain and simply go with your “gut instinct”! What is your “gut” telling you about what is being presented? How comfortable do you feel around that agent? A comfortable, trustworthy relationship is key in having a successful, business partnership because that is what you are establishing – a partnership.

Home Buying: The Final Chapter, Moving (Ugh!)

You have the keys in hand to your brand new home, but your stress has not ended – it is now time to move into your new home – in fact, moving is considered to be one of the most stressful events in anyone’s life. It is time-consuming and laborious, it can also take an emotional toll on everyone. There are many strategies out there that could help reduce the unpleasantness of moving, but here are some that will hopefully work for you as well:

  • Take an inventory of everything you own
  • Gather all documentation of antiques, paintings, jewelry, and other valuables
  • Gather and file all warranties, instruction booklets, and receipts
  • Gather all personal records
  • Gather all sales materials, fliers, copies of contracts, credit reports, telephone numbers, and everything associated with your move

Here is a moving checklist that will hopefully keep you organized leading up to and throughout your move:

Eight Weeks:

  • Remove necessary items from storage
  • Use things you cannot move
  • Secure a floor plan of your new home to assist in deciding what to and what not to keep
  • Start an inventory
  • Get estimates from at least three moving companies (if you are not going to move yourself)
  • Find out if your move is covered through your homeowner’s insurance
  • Create a file for documenting papers and receipts
  • Arrange to have children school records transferred if changing school districts

Six Weeks:

  • Find out about tax deductions
  • Evaluate possession inventory
  • Notify friends, family, professionals, creditors, subscriptions about your move
  • Begin the off-site storage process (if you plan on renting a storage unit)
  • Locate health care professional and hospitals (if you are moving to a completely new area)
  • Complete a change of address (postal service, banks, credit cards, etc.)
  • Clean closets
  • Hold moving/garage/yard sale or donate unwanted items
  • Select a mover (if applicable)
  • Contact your mover to make arrangement (if applicable)

Four Weeks:

  • Send furniture, drapes, carpets for repair/cleaning, if needed
  • Gather auto licensing and registration documents; medical, dental, and school records; birth certificates; wills; deeds; stock and other financial information
  • Contact gas, electric, oil, water companies; telephone, TV, trash collection companies for service disconnections and connections at both your old and new addresses
  • Request refunds on unused owner’s insurance, security deposit, and prepaid services
  • Contact insurance companies

Three Weeks:

  • Make travel plans if moving long distance
  • Arrange to close current bank accounts and open new ones, if necessary
  • Notify DMV of address change
  • Arrange for child care on moving day, if necessary

Two Weeks:

  • Arrange special transport for your pets and plants, if applicable
  • Service your car if making a long distance move
  • Contact your moving company and review the arrangements, if applicable

Not only can moving be stressful for you; if you have kids, it can be extremely stressful for them as well. Children need time to process big changes and there are many ways to help them with it: Good attitude, the use of media to help educate them on what they are going through, sensitivity, focusing on activities they enjoy, emphasizing how you will be staying in contact with old friends, giving them control over their new environment, assistance in packing their items, going over things to do at the new home. It is important to remember that is can take up to 16 months for adults an children to adjust to a large move.

Home Buying: Mortgage

If you want to be respected and considered a “real buyer”, then you need to have the evidence that you are prepared. One way to show that you are prepared is to have that preapproval letter from you lender in hand. Further, your agent would love to see you having that preapproval before they take you out to view homes because it not only protects you, but them as well. Overall, when you are preapproved, you are ready to buy!

Your preapproval letter should include the information that has been checked and evaluated (credit history, employment), along with the maximum loan amount, the type of loan (FHA, VA, USDA, Conventional), and the interest rate you are approved for.

Here is a fun fact for you, did you know there is a difference between a mortgage broker and a mortgage banker? A mortgage broker is a licensee through the state, who is able to sell loans to consumers. A mortgage banker is someone who works directly for an institution loaning the money, they can also issue you a preapproval letter directly.

When it comes time to apply for your loan, your lender will need the following financial records from you:

  • W2 forms or business tax return form if you’re self-employed, for the last two or three years for every person on the loan
  • Copies of one or more months of pay stubs from every person on the loan
  • Copies of two to four months of bank or credit union statements for both checking and savings accounts

A lender will also, most likely, require a credit report as well.

Tip: Compare loan programs first! When you are ready, then let the lender pull your credit. Wait to compare interest rates when you are ready to lock.

Your credit report can be defining factor is your ability to obtain a loan, even the amount of loan you are able to get. Here are five factors that determine your credit score:

  1. Your payment history
  2. How much you owe
  3. The length of your credit history
  4. How much credit you have
  5. The types of credit you use

When it comes time to compare loans, you should compare the interest rates among the lenders at the same time on the same day; ask for a written estimate of fees; ask for better terms if you can see that there are certain fees that are negotiable. Following are also ten questions that you should/could ask your lender:

  1. What are the most popular mortgage loans you offer?
  2. Which type of mortgage plan do you think would be the best for us? Why?
  3. Are your rates, terms, fee, and closing costs negotiable?
  4. Will I have to buy private mortgage insurance? If so, how much will it cost and how long will it be required?
  5. Who will service the loan? Your bank or another company?
  6. What escrow requirements do you have?
  7. How long is your loan lock-in period? Will I be able to obtain a lower rate if they drop during this period?
  8. How long will the loan approval process take?
  9. How long will it take to close the loan?
  10. Are there any charges or penalties for prepaying the loan?

When you are out there shopping for a mortgage that will work for you, remember that you are also shopping for the right lender as well. Be prepared to ask everything you need/want to know to assist you in making the best decision.

Home Buying: The Professionals

With the technology available this day and age, it is extremely easy for home buyers to look up properties via the internet – causing some consumers out there to question the value of real estate agent. Here are seven reasons why hiring an agent can increase your chances of successfully purchasing a home:

  1. They are market specialists
  2. They are neighborhood experts
  3. They have more information about homes than you do
  4. They can save you time
  5. They can work with you the way you want to work
  6. They share your risk
  7. They now how to close a deal

Some agents out there also specialize as “Buyer Agents”. They are experts in the home purchasing field, they cam:

  • Evaluate the specific needs and wants of the buyer and locate properties that fit those specifications
  • Assist buyers in determining the amount that they can afford and show them properties in that price range and locale
  • Assist in viewing properties and accompany the buyer on showings, or they can preview properties on behalf of the buyer to ensure that the identified specifications are met
  • Research the selected properties to identify any problems or issues to help the buyer make an informed decision prior to making an offer to purchase the property
  • Advise the buyer on structuring an appropriate offer to purchase the selected property
  • Present the offer to the seller’s agent and the seller on the buyer’s behalf
  • Negotiate on behalf of the buyer to help obtain the identified property, keeping the buyer’s best interest in mind
  • Assist in securing appropriate financing for the selected property
  • Most important, fully represent the buyer throughout the real estate transaction

Regardless, it is important that, as a buyer, you get the service and support you need. When it comes time to find an agent to work for you be sure to interview three different agents, and while interviewing look for professionalism. Further, evaluate their answers according to your needs. The agent should be knowledgeable, a good educator, capable, a good communicator,  and experienced. From there, you should be able to select the best candidate. Here are some questions that you can ask when interviewing:

  1. How long have you been in residential real estate?
  2. What designations do you hold?
  3. How many homes did you and your company sell last year?
  4. How close to the initial asking prices of the homes you sold were the final sales prices?
  5. Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction?
  6. Can you recommend service providers who can assist me in obtaining a mortgage, making repairs on my home, and other things I need done?
  7. What type of support and supervision does your brokerage office provide to you?
  8. What’s your business philosophy?
  9. How will you keep me informed about the progress of my transaction? How frequently? Using what media?

Home Buying: REALTORS

There are many benefits out there that are available to homeowners. Many of these benefits are in existence thanks to the lobbying efforts of the NATIONAL ASSOCIATION OF REALTORS. Some of these benefits that we are currently seeing, or have seen in the past are:

  • Federal tax relief and homeowner incentive (Tax Relief Act of 1997)
  • Mortgage interest rate deductions
  • Lower real estate taxes
  • Local tax benefits
  • Low-income assistance programs
  • Higher ceilings on federally insured loans for expensive markets
  • Tax-free gains on primary residences, owner-occupied two out of five years – $500,00 for married couples, $250,000 for singles
  • Protection from mortgage fraud and predatory lending
  • Freedom of choice in real estate agent selection and type of representation

Why lead of with those facts, you might say? REALTORS main focus are their clients, and they keep their consumer interests at heart. So, when it comes to buying a home, a REALTOR is there for you.

A minimum of 85% of consumers use real estate agents for buying or selling homes. Buying or selling is one of the biggest financial challenges a consumer may face, there are several financial and legal risks that are attached to buying a property.

Home Buying: Introduction

Buying a new home can seem like a daunting task. It will most likely be one of the largest investments you will ever make. When it comes to starting the process of purchasing a home, there are several things that you need to ask yourself and options that need to be considered. For example:

  • Hiring a real estate agent
  • The costs and rewards of homeownership
  • Deciding how much home to buy
  • Preparing your finances
  • Finding the right lender/loan program
  • Shopping for homes
  • Choosing the right community/lifestyle
  • Advantages an disadvantages of new homes and existing homes
  • Making an offer
  • Steps of a typical transaction
  • Who pays for what?
  • Moving day

Over the next couple of weeks, I am planning on covering most of these topics for you. In the hopes that you are able to gain a greater understanding and to become comfortable with the whole home purchasing process.