Edited 10/01/2013- I was dead wrong yesterday.
Well, no matter which side of the isle you are on, the government shutdown could affect you. As far as Real Estate transactions go.... this is a big deal.
President Obama said specifically that "Federal loans for rural communities, small business owners, families buying a home will be frozen,"
Yesterday, I went into each of the loan products and what the impact would be. Well, if you aren't already in process, there will be significant delays regardless of the loan product.
Mortgage companies use a system to verify SSN's and another system to verify tax returns/income. These systems are obviously run by the IRS. And, these systems are currently shut down.
Until the government is started back up, cash offers should carry even more weight than normal.
Wrong. This is one of the things that buyers often struggle with, but the seller has no obligation to fix the property or to reduce the price.
The due diligence period, or inspection period, depending on the contract, merely affords you the opportunity to have the home inspected. There is no obligation on the seller's part to complete repairs or reduce the price in lieu of repairs.
Once the inspection is complete, you can ask that the seller complete repairs. At that point, it becomes a negotiation. They may elect to fix everything you ask for, or NOTHING you ask for.
There are many things that affect the seller's decision.
#1) Market- If the market is a seller's market, (as it is right now in our area), the seller knows that even if you don't complete the purchase, someone else is right behind you bringing another contract. Now, conversely, two years ago, sellers just wanted to hold the contract together, so they would fix just about anything they could.
#2) Financial ability- Some sellers have no money to pay for repairs, or financial flexibility to reduce the price.
#3) Types of repairs- Is it a safety issue? Is it a functional issue? If so, many times, these get fixed. But, the reality is that if you are buying an existing home, and not one that is being built, there will be some minor things that the inspector can find. Even on well maintained homes. So be reasonable with what you are asking.
#4) Seller's perception of your original offer- If the contract price is really lower than they wanted to go, and they feel like you are getting a 'steal' to begin with, they will be less likely to complete repairs.
#5) Motivation- The market plays into this as well. However, if a seller is being transferred, or has another home under contract, or is getting a divorce, or..... fill in any scenario in which the seller has pressure to get the sale completed, then they will often agree to far more repairs in order to keep the contract and sale moving forward.
#6) Type of loan- Some loans like FHA, VA, and USDA all have minimum property standards. If the inspector finds something 'should' come up when the property is appraised by the bank, then the listing agent should advise the seller to go ahead and get it fixed to keep it from being an appraisal/lending condition.
#7) How long has the home been on the market- This goes into motivation as well. If the home was on the market for a week, then the seller may just elect to put it back on the market and get a buyer that is less picky. Heck, maybe one that doesn't even get an inspection. If the home has been on the market for a year, then they will be motivated to keep the sale moving forward.... of course, unless they just don't have the financial capability.
I have it posted elsewhere, but you should ALWAYS get a home inspection. When you fall for a home, it is often like the beginning of a romance..... there are flaws that you just don't see. Love is blind, after all.
To sum up, keep your requests to the items that would prevent you from buying the home. Try to picture being on the other side of the transaction and figure out what you would think was 'reasonable'.
Example- AC is not in working order. It is reasonable to ask the seller get AC to be in good working condition. It is not reasonable to expect the seller to replace the AC if they can get the existing unit working properly.
So, a while back, I started a series about what makes a good agent. There are obviously two sides to a deal. The agent that represents the buyer, known as a buyers agent or the selling agent. Then, there is the agent that represents the seller, known as a listing agent.
I wrote about some of the general things that makes a good agent with the part I of this series. Then, I posted what makes a good buyer's agent. Now, we will talk about what makes a good listing agent.
#1) Knowledge- I started to try to list out everything that a good agent should know. And, well, it was a long list. Here are the five major things that jumped out at me.
Property value- You don't want to ask too much and have the listing go stale, and you also don't want to under price your home and leave money on the table. (of course, in this market under priced homes are quickly bid up..so, believe it or not, it is even better to under price your home right now than to over price it)
Marketing- How to get the most eyes on your property. Yes, the listing services are a great start. It is more than just that. It is having a great website that ranks highly on Google. It is featuring them on Zillow, Trulia and Realtor.com. It is about getting them on Craigslist, Facebook, and Backpage. Basically, everywhere you can get them. Some agents feel it is a waste of time to run Craigslist and Backpage ads. But, the first time homebuyer often starts there because they are comfortable with that sight. They have looked for things there already. Most people try the familiar first.
Loan products and lenders- Why does this matter? The seller isn't getting a loan. The seller isn't buying the house. Why should the listing agent care? Well, there are many different loan programs out there. And, so many things depend on the type of loan. The listing agent should know the different types of loans and what the implications are. The two biggest factors that change with loan types are time to get done and repairs required. Some loan programs will require you to fix certain things. So, you may be looking at two similar offers and decide based on price alone. Only, one loan type may cost you thousands in repairs that the other would not have. Oh, and of course, if the listing agent knows the loan types, then they can help you navigate those waters more smoothly and get the house closed on time.
Common negotiating strategies- So many people think that the only thing that matters is price. But, this couldn't be further from the truth. Some buyers' agents actually overbid to get the house under contract, only to then negotiate the price during due diligence. Some look to have ridiculous contingency periods that protect them long after what is reasonable and well into the realm of abusive. Some overbid, knowing that the appraisal will knock it down. Other than perhaps the first one, these are not 'improper'. They are just strategies. There are more, especially when you get into different types of sale. Many negotiations are like chess matches. The good agents see the board from many different angles.
Contracts- We use standardized forms. However, so many agents have misconceptions about parts of the form. It's as if we don't need to read and understand them, because it is a 'standard' contract. And, due to this complacency, many agents put their clients in jeopardy by an improperly completed field.
#2) Communication- This is one of the most common complaints I hear. This is key. Not only to the seller, but also to other agents. I know how frustrating it can be calling a listing agent to show a home and not hearing back for days. Or, calling with a question so that I can submit an offer and hearing nothing. And, of course, communicating with the seller to let them know what is going on and what you are doing to get their house sold.
#3) Willingness to invest time, money and resources- Listing agents are only paid if they sell the home. Due to this, some are unwilling to invest the proper amount of time or, more importantly, money to getting the listing marketed correctly. The shortcuts that they take will help their wallet, but it certainly doesn't help your home sell or sell for as much as possible.
#4) Knowing our own limitations- I do not stage homes, nor do I take the photos that go on all my marketing. I hire a certified staging specialist and a professional photographer. Does this increase my expenses and decrease my bottom line? Yes. I could easily walk around and give you mediocre staging advice. But, I know that homes sell better when staged. And, I know that those photographs are what represents your home to millions of people. This is so very important, especially in upper price ranges. It isn't just about getting your home sold. It is about getting the most for your home in the shortest amount of time.
#5) Counsel- Your agent is your advocate. And, they should be willing to go to bat for you at all times. That should never change. They represent you in this transaction. However, they should also be able to put things in perspective. The other party may not be in the right. However, it may cost you more in the long run to be right, than to let the other party have their way. The agent has to be able to frame those conversations.
Like I said at the beginning, there is a lot that goes into being a great listing agent. It would be hard to pick the most important. I supposed it would be integrity. A person who has integrity would work on the rest because they would know how important each of these is.
What do you think the most important attributes are?