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Category Archive: ‘Tips, Advice & Links’
Hat tip to ‘just some guy’, who asked if I’ve had this happen. Yes, and my buyers had to take over the lease but it went smoothly. But could be a potential pitfall for less-engaged buyers!
Can going green by leasing solar panels for your roof cost you money — or give you headaches — when you go to sell the house?
Say you get pitched by one of the growing number of companies offering solar panels at no upfront cost that they claim will save you lots of money on electricity bills. Sounds like a slam-dunk. So you sign on.
Then a few years later you decide to sell the house. You assume that the presence of solar panels can only be a marketing plus, maybe even get you a higher price. Everybody goes for green, right?
Read full article here:
This article discusses the potential pitfalls of working with a friend-agent, but whether they are a friend or not, verify that they are good at what they do. The easiest and most-effective gauge is to check their Zillow page to see if they average at least one sale per month.
As the spring house-hunting season approaches, many Americans will be buying or selling a home – and some will enlist the help of a friend or relative who happens to work in real estate. But experts caution that hiring a friend as your real estate agent could backfire.
“Realtors tend to be a social bunch,” says Jon Sterling, who manages a team of agents for Keller Williams Realty and specializes in working with real estate investors. “I can’t say never hire a friend, but you shouldn’t hire them because you’re a friend. You shouldn’t do it as a favor – you should do it because they’re good at what they do.”
In some cases, people find that it’s easier to hire a friend rather than invest time interviewing several agents. In fact, a 2014 survey of nearly 300 sellers from the Redfin Research Center found that over a third evaluated only one agent before choosing one to list their home.
Before you hire a friend as your agent, here’s a look at potential pitfalls to consider.
1. Your friend may not know the neighborhoods that you want. Whether you’re buying or selling a home, you need an agent with intimate knowledge of the market in that specific geographic area. “I always get calls from cousins saying ‘Oh, you live in Florida, I’m thinking about buying a property in West Palm Beach,’” says Karyn Glubis, a real estate agent based in Tampa, Florida. “They assume that you know everything, and even if you live in a certain city, there’s several different areas of the city. I live in a certain ZIP code that I know with my eyes closed. If you ask me to go away from Tampa to [St. Petersburg], I don’t know that area.”
According to Mia Simon, a Redfin real agent based in Silicon Valley, it’s important for buyers or sellers to instead look for “someone who really has the local knowledge, the relationships with the main players and a really good grasp of the inventory.”
2. Your friend may think she knows what’s best for you. If you want a downtown loft and your friend pictures you in a suburban bungalow, it’s bound to create tension. Glubis ran into this issue when she helped her father shop for a three-bedroom townhome and he wanted a move-in ready property, while she showed him fixer-uppers. “He’s like, ‘I am 68 years old. I don’t want to fix up a house,’” she remembers. “People think they know what you deserve or what you want. A friend doesn’t have the boundaries that a client would have.”
Glubis has her clients fill in a “needs and wants” list (for instance, “I want an oak tree in the backyard, but I’m not crazy about hilly lots”). However, she didn’t take that step for her father because she assumed she already understood his needs and wants.
Another potential pitfall is if you’re buying an investment property and your Realtor friend doesn’t educate you on the responsibilities of a landlord because she assumes you’ve already researched it.
3. Your friend may put in less time. A friend helping you house hunt may not want to spend every weekend driving you around instead of working with other clients. That would put the onus on you to search listings and do the legwork. “You’re on Zillow and Trulia doing all your own research,” Glubis says. “You’re telling your friend what you need. The friend is more casual in their searching, making you do all the work.”
4. Your friend may not give you a reality check. You may not like hearing that the list price you want on your home is too high or your offer on a property is too low, but it’s your agent’s responsibility to give you the honest truth and serve as an objective outsider. “The competition [in Silicon Valley] is so fierce that you’re having to waive all contingencies and go way above list price. Having to advise a friend to do that could jeopardize a friendship” says Simon, who has never represented friends but will refer them to another agent on her team.
Discussions about your housing budget or the amount you’re willing to accept for your home might be more comfortable with someone you see strictly as a professional, not as a neighbor or yoga buddy.
5. Disagreements could sour the friendship. “When things go bad it really gets ugly, so Thanksgiving dinner could get weird if you’re in the middle of a really tough transaction with friends or family members, and the lines start to blur between your personal life and your professional life,” Sterling says. “I don’t ever want to put my friendships at risk because of a business transaction.” Like Simon, he’ll refer friends in the market to other agents he trusts who could better fit their needs.
Another sore spot for real estate agents is when they handle a transaction for a friend and that friend asks for the commission back, which Glubis says can make things uncomfortable.
That said, there may be situations when a friend-real estate agent arrangement works out. “If the friend is experienced and treats you like a client, if they take their job seriously and know the market you’re shopping in,” Glubis says, then it could be the right fit.
It is very typical to see new listings priced higher than the comps. If sellers keep adding a little mustard to their list prices, why do buyers keep paying it?
1. Buyers are payment shoppers. With rates this low, the mustard is cheap. If a buyer has to pay an extra $20,000 to beat out other bidders and win a house, it adds less than $100 per month to his payment.
2. Cash buyers have gone nutty. It used to be that cash buyers always drove the hardest bargains, but these days the craziest sales prices are almost always paid by a cash buyer. The money must be coming easier these days with the real estate and stock market run-ups, because it’s being spent willy-nilly.
3. Listing agents expect buyers to just pay their price, whether it is justified or not. Buyers concede due to mounting frustration, and end up surrendering.
4. Buyers are looking forward, not back. If they don’t pay this price for this house, somebody else probably will, and then it ends up being the comp for the next sale. The trend of rising prices makes buyers want to hurry up and get it done now, before it gets any worse.
The result is – or should be – less confidence in the valuations. If you see cash buyers throwing crazy money around, it’s difficult to consider those as legitimate comps. But in a fast-moving environment, logic and common sense get left by the wayside.
Buyers and sellers both can check the validity of comps by researching the neighborhood’s sales history at the last peak, and by factoring in the price reductions, days-on-market, and the buyer’s agent’s sales history.
Get Good Help!
When they first rolled out the improve-it-yourself feature, it turned out to be no more than an opportunity to list your upgrades – because little or no value was added to your zestimate. I received this by email today:
Today Zillow announced enhancements to the Zestimate® home value that allow homeowners to edit their home facts on Zillow and, depending on the new information they provide, potentially see an immediate impact on their Zestimate. For instance, if the square footage of a home is out of date on Zillow, the homeowner can correct this information and see an adjustment in their Zestimate.
Can listing agents use this feature to affect the Zestimate?
We encourage you to work with your seller prior to placing the home on the market to ensure all information on Zillow is accurate. If your seller is concerned about the Zestimate, check the home facts and make updates where needed. We suggest you communicate that the Zestimate is an estimate, not an appraisal.
We continue to iterate on our existing offerings to improve how buyers, sellers and homeowners use the resources available on Zillow. Should you have any questions about the Zestimate, visit www.zillow.com/zestimate.
Greg Schwartz, Chief Revenue Officer, Zillow Group
I’ll believe it when I see it! In the end, the zestimates will likely be more inaccurate as sellers fluff their values to the moon. But Zillow is learning the ways of the industry, and is now siding with the sellers. Get Good Help!
A glimpse of the Aviara one-story coastal estate (update: we have interested parties, no offers), a view you don’t see too often, and some general tips taped a couple of weeks ago:
Broadview Networks compiled a list of real estate blogs around the country. The common theme among them? Get good help!
Check them out here:
The son of a past client scored a good job in San Francisco a few years back, and is looking at 1-bedroom condos going for $700,000 – $800,000.
They wondered if I had any tips.
Good golly, at that rate I better come up with something!
1. Get a good realtor. These high-dollar areas pay big commissions and thus, attract plenty of real estate licensees. But you need a great agent who knows more than you do, and brings extra value to the equation. Ask how many times they’ve talked someone out of buying a home recently.
Not only will a great agent make you feel comfortable about the price/value equation, but their market cred will help too – because good agents want to work with good agents. It happens regularly that my personal relationship with the other agent makes a difference in the outcome.
How do you find a good agent? The best luck I’ve had is searching for agents at Zillow, but you have to read through sales histories and testimonials (in that order) of each agent to find the right fit. Also check their recent sales history to see if they have been selling similar homes and/or working your area.
I don’t care what company an agent works for, because real estate is an individual sport. I’m not impressed by the big realtor teams either – I want individual attention. I reviewed the first two pages on Zillow for San Francisco agents, and found this one:
An agent’s recent sales is the best measure, and not only is she selling 3-4 per month but she also lists her annual production too – and she was consistent during the downturn. She has been a realtor for 20 years, and has over 300 closings submitted to Zillow.
She has three listings, which, in this market, is about right – if you are good, they should be selling, not sitting. Plus she has a 1-bedroom listing for $735,000! I don’t know if she passes you off to an assistant, but if not, she’s a qualified possibility.
The agents input their own listings and sales history, and Zillow provides a form for them to email to past clients to solicit their testimonials. But all of her client ratings were the full five stars, which is exceptional.
2. Buy For the Long-Term. You may get stuck with this one for a while, so make sure you get what you want and need. Keep exploring other areas for alternatives you haven’t thought of yet.
3. Know the Inventory. You may only have minutes to make decisions, be prepared. Get auto-notifications of new listings to stay up on the market, and go to open houses – not just to find a home to buy, but also to study the market patterns. You may not buy this one, but when you see it go pending, know why somebody else found it attractive. If nothing else, at least be an online expert that follows the data closely – and don’t be surprised if you keep seeing crazy sales; they are almost always attributed to buyer frustration and lousy representation.
4. Get Pre-Qualified. Once you select a realtor, get pre-qualified for a mortgage using their recommended lender – they might bring some street cred too. You either use a 20% down payment or you don’t, and either is fine. If you don’t want to use a 20% down payment, you can do an 80/10/10 (1st and 2nd loans) that will at least lock you in to a low-rate 1st mortgage for the duration. If you end up with less than 20% down and only want a first mortgage, you need PMI – private mortgage insurance. But if you get lucky, you can have the seller pay the entire premium up front (around 3%), so it won’t cost you anything monthly.
5. Know the Contract. With Docusign, the electronic-signature process, signing a contract goes a little too fast. Instead of reading the contract together with your agent in the corner booth at the local coffee shop, today you just rapid-click on your phone or PC to imprint your initials and signatures and whoosh, off it goes. Know what you are signing! The two most important paragraphs are 3K and 14.
6. Time is of the Essence. It is likely that most buyers will lose at least one property because they don’t react fast enough. I just had a case where I called the listing agent of a house that my clients had just decided to buy. The listing agent told me that she had been working back-and-forth with a buyer and other agent, and had just received a counter-offer that was acceptable to her sellers – and she was about to send it to them for final signature!
In these moments, your agent has to say the right thing. In this case, not only did I stop the agent from signing a cash offer, I got her to accept my financed buyers’ offer instead!
This is a fast-moving environment and each day the best deals get picked up – if you like a home, chances are somebody else does too.
7. Consider Fixers. Be picky about location and floor plan, because you can’t change those. But most buyers shy away from homes that need work, which can open up opportunities. Get comfortable with the costs of fixing in advance, and know what you are looking at. You can get a full evaluation and cost estimate during your contingency period.
8. Make Offers. Once your first salvo goes over the bow, the comfort level improves greatly. Include a love letter that tugs at the sellers’ heartstrings.
9. What to Offer. The price to offer is directly related to the time on market. If it is the first week of the listing and you recognize it to be a good value, you will probably have to pay all the money. But I hate to offer full price, because in the first week the sellers want to dicker, and full price doesn’t give them anywhere to go. If you know there aren’t any other offers, then come in $20,000, $30,000 or $40,000 under the list price so the math is easy for the seller to split the difference. If you hear subsequently that there are other offers, re-submit your offer with a higher price so you don’t get forgotten.
10. Use Bubbleinfo.com as a Resource – You may not get any local-SF specific data but general information is available by using the Search feature at the top of the front page here. For example, I typed in ‘Bidding Wars’ and got this link to a wide-ranging set of blog posts about winning a bidding war:
You and your agent need to be bidding-war experts. The low-end is what’s moving the fastest, and though $700,000-$800,000 sounds insane for one-bedroom condos, it is what it is.
Plan on devoting time and energy to this project. The more invested, the better the results!
Summertime is the season for real estate, so if you’re looking to put your home on the market, make sure it’s ready to sell. Host of HGTV’s “Rehab Addict” Nicole Curtis is dishing on four inexpensive insider tricks to help market your home and get the best price.
Hat tip to Susie for sending this in from CNNMoney:
Tim Trampedach, a 36-year-old business owner who lives in San Francisco, has seen his home’s value soar from $1.2 million to $1.6 million in the past three years. He and his wife want to move into a bigger place, but there are simply no homes within their price range in their Portrero Hill neighborhood.
“My wife and I are effectively locked into the house,” he said. “We can’t sell because we can’t afford anything else nearby.”
They would probably struggle to buy their existing home at its current value of $1.6 million, let alone buy a more-expensive home that would make it worth it to move. If you just bought at $1.2M, jumping up to $2,000,000 or more is a big stretch.
But if you can make the jump financially, then how do you pull it off?
Here are more excerpts from the article:
In fact, demand is so high that real estate agents are actively seeking people who are willing to sell. “You get letters in the mail asking if you’re interested in selling,” said Jackson. “People knock on your doors.”
In mid-April she got an enticing, unsolicited offer on the house, which Zillow estimates to be worth $420,000.
“My husband and I talked it over,” she said. “We hemmed and hawed. It was too good to be true, but we worried: Would we find a house we wanted?”
The buyer agreed to give the couple until October to find a new place, so they took the offer.
One way sellers can protect themselves is to make the sale of their home contingent upon their ability to find another one to move into.
Patrick Matson and his fiance, Margarita Munoz, insisted on such a clause when they put their Anaheim, Calif. home up for sale. Up until last Friday they had an offer on their home, but their own search did not go well.
The couple had made offers on two homes in La Mirada, where they liked the school district for their four-year-old son. But both offers were rejected.
The homes they looked at were between $430,000 and $480,000, but were no bigger or better than their current place, which they listed for $415,000.
Discouraged, the couple decided to reject the offer and take their home off the market.
“It was not an easy decision to make, provided that we knew the folks who had an offer in on our home were going to be disappointed and it wasn’t what we wanted either,” said Matson.
The couple plans to make some upgrades to their current place and will try again in a year or two, he said. “Hopefully the market won’t be so competitive by then.”
You have to be able to buy high enough to make it worth it – my rule of thumb is 50% higher than the old house – AND be able to convince the seller that you aren’t submitting an offer contingent upon finding a buyer for your old house. Having your buyers do their inspection and appraisal and then release their contingencies would go a long way to making your offer look non-contingent.
You may have to help your buyer with some costs to get to that stage, but to pull it off the move-up, you have to make bold and decisive moves, work with a great agent, and hope for some luck!